KT CORP

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of KT Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statement of financial position of KT Corporation and its subsidiaries (the “Company”) as of December 31, 2023, the related consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows, for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in

Internal Control—Integrated Framework (2013)

issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting included in Item 15. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for

F-2

external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Mobile services revenue and handset revenue for mobile services (“Mobile revenue”)—Refer to Notes 2 and 25 to the consolidated financial statements

Critical Audit Matter Description

As described in Note 2.25 to the financial statements, the Company recognizes handset revenue for mobile services at the point in time when control of the handset is transferred to the customer. The Company recognizes telecommunication services revenue over the estimated periods of each service by transferring promised services to customers. Due to the large volume of

low-dollar

transactions with customers, the Company needs complex and elaborate information technology systems to accurately record mobile revenue.

We identified the occurrence and accuracy of mobile revenue as a critical audit matter given the magnitude and complexity of mobile revenue recorded in the billing system of the Company, which required the involvement of professionals with expertise in information technology (IT) necessary for us to identify and test the Company’s billing system used in processing the mobile revenue transactions.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s mobile revenue transactions included the following, among others:

•

We obtained an understanding of the Company’s information system and business processes, relevant to mobile revenue.

•

With the assistance of our IT specialists, we identified the relevant systems used to process mobile revenue and tested the relevant general information technology controls.

•

We reconciled the mobile revenue in the billing system with the revenue in the ledger.

•

We developed an expectation of mobile services revenue amounts using historical service revenue and subscriber information and compared it to the recorded amount.

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Report of Independent Registered Public Accounting Firm

To the shareholder and board of directors of KT Corporation

Opinion on the Financial Statements

We have audited the consolidated statement of financial position of KT Corporation, and its subsidiaries (the “Company”) as of December 31, 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for each of the two years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its

cash flows for each of the two years in the period ended December 31, 2022 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/Samil PricewaterhouseCoopers

KT Corporation and Subsidiaries

Consolidated Statements of Financial Position (Continued)

As of

December 31, 2022 and 2023


(In millions of Korean won)	Notes		December 31, 2022			December 31, 2023

Liabilities

Current liabilities
Trade and other payables		4,14,37	￦	7,333,165		￦	8,054,922
Borrowings		4,15,37		1,827,042			3,058,564
Other financial liabilities		4,7,37		8,791			322,099
Current income tax liabilities				232,382			236,463
Provisions		1 6		109,133			115,209
Deferred revenue		25		55,737			51,537
Other current liabilities		9		1,133,018			1,408,843

Total current liabilities				10,699,268			13,247,637

Non-current liabilities
Trade and other payables		4, 1 4, 37		1,064,099			819,558
Borrowings		4, 15 , 37		8,179,643			7,159,601
Other financial liabilities		4,7 ,37		412,650			753,739
Defined benefit liabilities, net		1 7		51,654			63,616
Provisions		1 6		91,233			107,014
Deferred revenue		25		165,186			153,563
Deferred income tax liabilities		29		967,650			994,330
Other non-current liabilities		9		945,731			950,015

Total non-current liabilities				11,877,846			11,001,436

Total liabilities				22,577,114			24,249,073

Equity
Share capital		2 1		1,564,499			1,564,499
Share premium				1,440,258			1,440,258
Retained earnings		2 2		14,255,316			14,475,867
Accumulated other comprehensive income (loss)		2 3		(77,776	)		52,407
Other components of equity		2 3		(572,152	)		(802,418	)

Equity attributable to owners of the Controlling Company				16,610,145			16,730,614

Non-controlling interest				1,802,551			1,811,961

Total equity				18,412,696			18,542,575

Total liabilities and equity			￦	40,989,810		￦	42,791,647

The above consolidated statements of financial position should be read in conjunction with the accompanying notes.

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Table of Contents

KT Corporation and Subsidiaries

Consolidated Statements of Changes in Equity

Years ended December 31, 2021, 2022 and 2023


			Attributable to owners of the Controlling Company
(In millions of Korean won)	Notes		Share capital		Share premium		Retained earnings			Accumulated other comprehensive income			Other components of equity			Total			Non-controlling interest			Total equity
Balance as at January 1, 2021			￦	1,564,499	￦	1,440,258	￦	12,155,420		￦	86,051		￦	(1,234,784	)	￦	14,011,444		￦	1,539,989		￦	15,551,433

Comprehensive income
Profit for the year				—		—		1,356,878			—			—			1,356,878			102,517			1,459,395
Remeasurements of net defined benefit liabilities		17,29		—		—		47,348			—			—			47,348			8,474			55,822
Share of gain on remeasurements of associates and joint ventures				—		—		(1,559	)		—			—			(1,559	)		(37	)		(1,596	)
Share of other comprehensive loss of associates and joint ventures				—		—		—			(19,718	)		—			(19,718	)		(4,498	)		(24,216	)
Valuation gain on cash flow hedge		4,29		—		—		—			5,222			—			5,222			50			5,272
Gain on valuation of financial instruments at fair value through other comprehensive income		4,29		—		—		76,288			47,247			—			123,535			6,245			129,780
Exchange differences on translation of foreign operations				—		—		—			(1,333	)		—			(1,333	)		1,838			505

Total comprehensive income for the year				—		—		1,478,955			31,418			—			1,510,373			114,589			1,624,962


Transactions with owners
Dividends paid by the Controlling Company		31		—		—		(326,487	)		—			—			(326,487	)		—			(326,487	)
Dividends paid to non-controlling interest of subsidiaries				—		—		—			—			—			—			(23,762	)		(23,762	)
Acquisition and disposition of businesses				—		—		—			—			—			—			(17,566	)		(17,566	)
Changes in ownership interest in subsidiaries				—		—		—			—			15,797			15,797			(22,620	)		(6,823	)
Appropriations of loss on disposal of treasury stock				—		—		(20,498	)		—			20,498			—			—			—
Acquisition of treasury stock				—		—		—			—			(190,105	)		(190,105	)		—			(190,105	)
Disposal of treasury stock				—		—		—			—			50,954			50,954			—			50,954
Recognition of the obligation to purchase its own equity				—		—		—			—			(101,829	)		(101,829	)		—			(101,829	)
Others				—		—		—			—			6,389			6,389			(5	)		6,384

Subtotal				—		—		(346,985	)		—			(198,296	)		(545,281	)		(63,953	)		(609,234	)

Balance as at December 31, 2021			￦	1,564,499	￦	1,440,258	￦	13,287,390		￦	117,469		￦	(1,433,080	)	￦	14,976,536		￦	1,590,625		￦	16,567,161

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

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Table of Contents

KT Corporation and Subsidiaries

Consolidated Statements of Changes in Equity (Continued)

Years ended December 31, 2021, 2022 and 2023


			Attributable to owners of the Controlling Company
(In millions of Korean won)	Notes		Share capital		Share premium		Retained earnings			Accumulated other comprehensive income			Other components of equity			Total			Non-controlling interest			Total equity
Balance as at January 1, 2022			￦	1,564,499	￦	1,440,258	￦	13,287,390		￦	117,469		￦	(1,433,080	)	￦	14,976,536		￦	1,590,625		￦	16,567,161


Comprehensive income
Profit for the year				—		—		1,260,470			—			—			1,260,470			125,165			1,385,635
Remeasurements of net defined benefit liabilities		17,29		—		—		165,524			—			—			165,524			15,905			181,429
Share of gain on remeasurements of associates and joint ventures				—		—		(189	)		—			—			(189	)		(143	)		(332	)
Share of other comprehensive loss of associates and joint ventures				—		—		—			(8,291	)		—			(8,291	)		(2,560	)		(10,851	)
Valuation loss on cash flow hedge		4, 29		—		—		—			(32,140	)		—			(32,140	)		810			(31,330	)
Loss on valuation of financial instruments at fair value through other comprehensive income(loss)		4, 29		—		—		4,091			(160,785	)		—			(156,694	)		(1,880	)		(158,574	)
Exchange differences on translation of foreign operations				—		—		—			5,971			—			5,971			11,493			17,464

Total comprehensive income for the year				—		—		1,429,896			(195,245	)		—			1,234,651			148,790			1,383,441


Transactions with owners
Dividends paid by the Controlling Company		31		—		—		(450,393	)		—			—			(450,393	)		—			(450,393	)
Dividends paid to non-controlling interest of subsidiaries				—		—		—			—			—			—			(26,407	)		(26,407	)
Acquisition and disposition of businesses				—		—		—			—			—			—			3,152			3,152
Changes in ownership interest in subsidiaries				—		—		—			—			88,924			88,924			32,695			121,619
Appropriations of loss on disposal of treasury stock				—		—		(11,577	)		—			11,577			—			—			—
Disposal of treasury stock				—		—		—			—			763,081			763,081			—			763,081
Conversion of redeemable convertible preferred shares of subsidiaries to common shares				—		—		—			—						—			51,476			51,476
Others				—		—		—			—			(2,654	)		(2,654	)		2,220			(434	)

Subtotal				—		—		(461,970	)		—			860,928			398,958			63,136			462,094

Balance as at December 31, 2022			￦	1,564,499	￦	1,440,258	￦	14,255,316		￦	(77,776	)	￦	(572,152	)	￦	16,610,145		￦	1,802,551		￦	18,412,696

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

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Table of Contents

KT Corporation and Subsidiaries

Consolidated Statements of Changes in Equity (Continued)

Years ended December 31, 2021, 2022 and 2023


			Attributable to owners of the Controlling Company
(In millions of Korean won)	Notes		Share capital		Share premium		Retained earnings			Accumulated other comprehensive income			Other components of equity			Total			Non-controlling interest			Total equity
Balance as at January 1, 2023			￦	1,564,499	￦	1,440,258	￦	14,255,316		￦	(77,776	)	￦	(572,152	)	￦	16,610,145		￦	1,802,551		￦	18,412,696


Comprehensive income
Profit for the year				—		—		993,325			—			—			993,325			(21,143	)		972,182
Remeasurements of net defined benefit liabilities		17,29		—		—		(126,613	)		—			—			(126,613	)		(10,852	)		(137,465	)
Share of gain (loss) on remeasurements of associates and joint ventures				—		—		(118	)		—			—			(118	)		13			(105	)
Share of other comprehensive income of associates and joint ventures				—		—		—			15,775			—			15,775			5,820			21,595
Valuation loss on cash flow hedge		4, 29		—		—		—			(22,252	)		—			(22,252	)		(361	)		(22,613	)
Gain(loss) on valuation of financial instruments at fair value through other comprehensive income		4, 29		—		—		222			126,028			—			126,250			(4,445	)		121,805
Exchange differences on translation of foreign operations				—		—		—			10,632			—			10,632			13,598			24,230

Total comprehensive income for the year				—		—		866,816			130,183			—			996,999			(17,370	)		979,629


Transactions with owners
Dividends paid by the Controlling Company		31		—		—		(501,844	)		—			—			(501,844	)		—			(501,844	)
Dividends paid to non-controlling interest of subsidiaries				—		—		—			—			—			—			(24,964	)		(24,964	)
Acquisition and disposition of businesses				—		—		—			—			—			—			(79,134	)		(79,134	)
Changes in ownership interest in subsidiaries				—		—		—			—			216,841			216,841			128,526			345,367
Appropriations of loss on disposal of treasury stock				—		—		(44,421	)		—			44,421			—			—			—
Acquisition of treasury stock				—		—		—			—			(300,243	)		(300,243	)		—			(300,243	)
Disposal of treasury stock				—		—		—			—			4,463			4,463			—			4,463
Retirement of treasury stock				—		—		(100,000	)		—			100,000			—			—			—
Recognition of the obligation to purchase its own equity				—		—		—			—			(298,196	)		(298,196	)		—			(298,196	)
Others				—		—		—			—			2,448			2,448			2,352			4,800

Subtotal				—		—		(646,265	)		—			(230,266	)		(876,531	)		26,780			(849,751	)

Balance as at December 31, 2023			￦	1,564,499	￦	1,440,258	￦	14,475,867		￦	52,407		￦	(802,418	)	￦	16,730,614		￦	1,811,961		￦	18,542,575

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

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Table of Contents

KT Corporation and Subsidiaries

Consolidated Statements of Cash Flows

Years ended December 31, 2021, 2022 and 2023


(In millions of Korean won)
	Notes		2021			2022			2023
Cash flows from operating activities
Cash generated from operations		3 2	￦	5,829,607		￦	3,835,879		￦	5,747,195
Interest paid				(257,809	)		(263,520	)		(361,741	)
Interest received				272,061			307,091			360,614
Dividends received				74,441			68,827			60,987
Income tax paid				(356,466	)		(351,212	)		(303,766	)

Net cash inflow from operating activities				5,561,834			3,597,065			5,503,289

Cash flows from investing activities
Collection of loans				54,934			44,287			53,885
Loans granted				(54,128	)		(43,694	)		(37,771	)
Disposal of financial assets at fair value through profit or loss				609,849			1,298,621			90,487
Disposal of financial assets at amortized cost				690,457			1,046,115			1,543,663
Disposal of financial assets at fair value through other comprehensive income				244,994			97,932			306
Disposal of assets held-for-sale				—			4,600			—
Disposal of investments in associates and joint ventures				10,880			34,828			6,890
Acquisition of investments in associates and joint ventures				(487,828	)		(280,988	)		(106,389	)
Disposal of property and equipment, and investment properties				174,413			178,063			100,348
Acquisition of property and equipment, and investment properties				(3,495,021	)		(3,439,857	)		(3,692,972	)
Acquisition of financial assets at fair value through profit or loss				(753,907	)		(1,317,175	)		(220,989	)
Acquisition of financial assets at amortized cost				(623,924	)		(1,450,442	)		(1,875,525	)
Acquisition of financial assets at fair value through other comprehensive income				(131,674	)		(449,504	)		(10,267	)
Disposal of intangible assets				11,624			20,088			7,078
Disposal of right-of-use assets				318			97			529
Settlement of derivative assets and liabilities				—			—			4,888
Acquisition of intangible assets				(752,181	)		(545,190	)		(478,685	)
Acquisition of right-of-use assets				(4,261	)		(2,090	)		(1,065	)
Acquisition of businesses				(671,359	)		(41,088	)		(51,561	)
Disposal of businesses				39,340			6,754			46,642

Net cash outflow from investing activities				(5,137,474	)		(4,838,643	)		(4,620,508	)

Cash flows from financing activities		3 3
Proceeds from borrowings and debentures				2,899,567			4,234,570			5,381,231
Repayments of borrowings and debentures				(1,999,173	)		(2,843,249	)		(5,275,113	)
Settlement of derivative assets and liabilities, net				(1,496	)		35,083			48,183
Cash inflow from issuance of shares to NCI				67,693			125,066			632,776
Cash outflow from issuance of shares to NCI				(11,001	)		(28,848	)		(7,988	)
Cash inflow from other financing activities				2,556			2,193			2,082
Dividends paid to shareholders				(350,334	)		(476,800	)		(526,826	)
Acquisition of treasury stock				(193,626	)		—			(300,086	)
Cash outflow from other financing activities				(60,901	)		—			—
Repayment of leases liabilities				(394,567	)		(378,684	)		(407,051	)

Net cash outflow from financing activities				(41,282	)		669,331			(452,792	)

Effect of exchange rate change on cash and cash equivalents				1,890			1,717			503

Net increase (decrease) in cash and cash equivalents				384,968			(570,530	)		430,492
Cash and cash equivalents
Beginning of the year		5		2,634,624			3,019,592			2,449,062

End of the year		5	￦	3,019,592		￦	2,449,062		￦	2,879,554

The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

1.	General Information

The consolidated financial statements have been prepared by KT Corporation, the “Controlling company” as defined under IFRS 10

Consolidated Financial Statements

, by consolidating 84 subsidiaries (collectively referred to as the “Group”) including BC Card Co., Ltd., etc. as described in Note 1.2

1.1

The Controlling Company

KT Corporation (the “Controlling Company”) commenced operations on January 1, 1982, when it spun off from the Korea Communications Commission (formerly the Korean Ministry of Information and Communications) to provide telecommunication services and to engage in the development of advanced communications services under the Act of Telecommunications of Korea. The headquarters are located in Seongnam City, Gyeonggi Province, Republic of Korea, and the address of its registered head office is 90, Buljeong-ro, Bundang-gu, Seongnam City, Gyeonggi Province.

On October 1, 1997, upon the announcement of the Government-Investment Enterprises Management Basic Act and the Privatization Law, the Controlling Company became a government-funded institution under the Commercial Code of Korea.

On December 23, 1998, the Controlling Company’s shares were listed on the Korea Exchange.

On May 29, 1999, the Controlling Company issued 24,282,195 additional shares and issued American Depository Shares (ADS), which represents new shares and 20,813,311 government-owned shares, on the New York Stock Exchange. On July 2, 2001, additional ADS representing 55,502,161 government-owned shares were issued on the New York Stock Exchange.

In 2002, the Controlling Company acquired the entire government-owned shares in accordance with the Korean government’s privatization plan. As of December 31, 2023, the Korean government does not own any shares in the Controlling Company.

1.2

Consolidated Subsidiaries

(1) The consolidated subsidiaries as of December 31, 2022 and 2023, are as follows


			Controlling percentage ownership 1 (%)
Subsidiary	Type of business	Location	December 31, 2022	December 31, 2023	Closing month
KT Linkus Co., Ltd.	Public telephone maintenance	Korea	92.4%	92.4%	December
KT Telecop Co., Ltd.	Security service	Korea	86.8%	86.8%	December
KT Alpha Co., Ltd. 5	Data communication	Korea	73.0%	73.0%	December
KT Service Bukbu Co., Ltd	Opening services of fixed line	Korea	67.3%	67.3%	December
KT Service Nambu Co., Ltd.	Opening services of fixed line	Korea	77.3%	77.3%	December
KT Commerce Inc.	B2C, B2B service	Korea	100.0%	100.0%	December
KT Strategic Investment Fund No.3	Investment fund	Korea	100.0%	100.0%	December
KT Strategic Investment Fund No.4	Investment fund	Korea	100.0%	100.0%	December
KT Strategic Investment Fund No.5	Investment fund	Korea	100.0%	100.0%	December
BC-VP Strategic Investment Fund No.1	Investment fund	Korea	100.0%	100.0%	December
BC Card Co., Ltd.	Credit card business	Korea	69.5%	69.5%	December

F-14

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


			Controlling percentage ownership 1 (%)
Subsidiary	Type of business	Location	December 31, 2022	December 31, 2023	Closing month
VP Inc. 5	Payment security service for credit card, others	Korea	69.7%	72.2%	December
H&C Network	Call center for financial sectors	Korea	100.0%	100.0%	December
BC Card China Co., Ltd.	Software development and data processing	China	100.0%	100.0%	December
INITECH Co., Ltd. 5	Internet banking ASP and security solutions	Korea	61.3%	63.9%	December
Smartro Co., Ltd.	VAN (Value Added Network) business	Korea	64.5%	64.5%	December
KTDS Co., Ltd. 5	System integration and maintenance	Korea	95.6%	91.6%	December
KT M&S Co., Ltd.	PCS distribution	Korea	100.0%	100.0%	December
GENIE Music Corporation 2	Online music production and distribution	Korea	36.0%	36.0%	December
KT MOS Bukbu Co., Ltd. 5	Telecommunication facility maintenance	Korea	100.0%	100.0%	December
KT MOS Nambu Co., Ltd. 5	Telecommunication facility maintenance	Korea	98.4%	98.4%	December
KT Skylife 5	Satellite TV	Korea	50.2%	50.6%	December
Skylife TV Co., Ltd.	TV contents provider	Korea	100.0%	100.0%	December
KT Estate Inc.	Residential building development and supply	Korea	100.0%	100.0%	December
KT Investment Management Inc.	Asset management, real estate and consulting services	Korea	100.0%	100.0%	December
NEXR Co., Ltd.	Cloud system implementation	Korea	100.0%	100.0%	December
KTGDH Co., Ltd.	Data center development and related service	Korea	100.0%	100.0%	December
KT Sat Co., Ltd.	Satellite communication business	Korea	100.0%	100.0%	December
Nasmedia Co., Ltd. 2,5	Solution provider and IPTV advertisement sales business	Korea	44.0%	44.1%	December
KT Sports Co., Ltd.	Management of sports teams	Korea	100.0%	100.0%	December
KT Music Contents Fund No.2	Music and contents investment business	Korea	100.0%	100.0%	December
KTCS Corporation 2,5	Database and online information provider	Korea	34.1%	34.1%	December
KTIS Corporation 2,5	Database and online information provider	Korea	33.3%	33.3%	December
KT M Mobile Co., Ltd.	Special category telecommunications operator and sales of communication device	Korea	100.0%	100.0%	December
KT Investment Co., Ltd.	Financing business for new technology	Korea	100.0%	100.0%	December
PlayD Co., Ltd.	Advertising agency	Korea	70.4%	70.4%	December
Next Connect PFV	Residential building development and supply	Korea	100.0%	100.0%	December
KT Rwanda Networks Ltd.	Network installation and management	Rwanda	51.0%	51.0%	December
AOS Ltd.	System integration and maintenance	Rwanda	51.0%	51.0%	December
KT Japan Co., Ltd.	Foreign investment business and local counter work	Japan	100.0%	100.0%	December

F-15

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


			Controlling percentage ownership 1 (%)
Subsidiary	Type of business	Location	December 31, 2022	December 31, 2023	Closing month
East Telecom LLC	Wireless/fixed line internet business	Uzbekistan	91.6%	91.6%	December
KT America, Inc.	Foreign investment business and local counter work	USA	100.0%	100.0%	December
PT. BC Card Asia Pacific	Software development and supply	Indonesia	99.9%	99.9%	December
KT Hongkong Telecommunications Co., Ltd.	Fixed line telecommunication business	Hong Kong	100.0%	100.0%	December
Korea Telecom Singapore Pte. Ltd.	Foreign investment business and local counter work	Singapore	100.0%	100.0%	December
Texnoprosistem LLC	Fixed line internet business	Uzbekistan	100.0%	100.0%	December
Nasmedia Thailand Co., Ltd.	Internet advertising solution	Thailand	99.9%	99.9%	December
KT Huimangjieum	Manufacturing	Korea	100.0%	100.0%	December
K-REALTY RENTAL HOUSING REIT 3	Residential building	Korea	88.6%	88.6%	December
Storywiz Co., Ltd.	Contents and software development and supply	Korea	100.0%	100.0%	December
KT Engineering Co., Ltd.	Telecommunication facility construction and maintenance	Korea	100.0%	100.0%	December
KT Studio Genie Co., Ltd.	Data communication service and data communication construction business	Korea	90.9%	90.9%	December
KHS Corporation	Operation and maintenance of facilities	Korea	100.0%	100.0%	December
Lolab Co., Ltd.	Truck transportation and trucking arrangement business	Korea	79.8%	79.8%	December
HCN Co., Ltd.	Cable television service	Korea	100.0%	100.0%	December
Millie Seojae 2	Book contents service	Korea	38.6%	30.2%	December
KT ES Pte. Ltd.	Foreign investment business	Singapore	57.6%	57.6%	December
Epsilon Global Communications PTE. Ltd.	Network service industry	Singapore	100.0%	100.0%	December
Epsilon Telecommunications (SP) PTE. Ltd.	Fixed line telecommunication business	Singapore	100.0%	100.0%	December
Epsilon Telecommunications (US) PTE. Ltd.	Fixed line telecommunication business	Singapore	100.0%	100.0%	December
Epsilon Telecommunications Limited	Fixed line telecommunication business	UK	100.0%	100.0%	December
Epsilon Telecommunications (HK) Limited	Fixed line telecommunication business	Hong Kong	100.0%	100.0%	December
Epsilon US Inc.	Fixed line telecommunication business	USA	100.0%	100.0%	December
Epsilon Telecommunications (BG) EOOD	Employee support service	Bulgaria	100.0%	100.0%	December
Nasmedia-KT Alpha Future Growth Strategic Investment Fund	Investment fund	Korea	100.0%	100.0%	December
KT Strategic Investment Fund 6	Investment fund	Korea	100.0%	100.0%	December
Altimedia Corporation	Software development and delivery	Korea	100.0%	100.0%	December
Altimidia B.V. (formerly Alticast B.V.)	Software development and delivery	Netherlands	100.0%	100.0%	December

F-16

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


			Controlling percentage ownership 1 (%)
Subsidiary	Type of business	Location	December 31, 2022	December 31, 2023	Closing month
Altimidia Vietnam (formerly Alticast Company Limited)	Software development and delivery	Vietnam	100.0%	100.0 %	December
BCCARD VIETNAM LTD.	Software sales business	Vietnam	100.0%	100.0%	December
KTP SERVICES INC.	Fixed line telecommunication business	Philippines	100.0%	100.0%	December

KT RUS LLC	Foreign investment business	Russia	100.0%	100.0%	December
Hangang Real Estate Investment Trust No. 24	Investment fund	Korea	75.0%	75.0%	December
KT DX Vietnam Company Limited	Software development	Vietnam	100.0%	100.0%	December
KT Cloud Co., Ltd.	Information and communications development	Korea	100.0%	92.7%	December
Pocheon Jeonggyori Development Co., Ltd.	Residential building development	Korea	80.9%	80.9%	December
PT CRANIUM ROYAL ADITAMA	Software development	Indonesia	67.0%	67.0%	December
Juice Inc. 3,5	Online information provider/Software development and delivery	Korea	41.2%	42.6%	December
open cloud lab Co., Ltd (formerly SPARK AND ASSOCIATES INC.)	IT consulting service and Telecommunication equipment sales	Korea	100.0%	100.0%	December
KD Living, Inc.	Residential building management	Korea	—	100.0%	December
KT HEALTHCARE VINA COMPANY LIMITED	Medical service	Vietnam	—	100.0%	December
K-Realty Qualified Private Real Estate Investment Trust No. 1 4	Real estate management	Korea	—	6.5%	December
AQUA RETAIL VIETNAM COMPANY LIMITED	E-voucher issuance and trading business	Vietnam	—	100.0%	December
K-Realty Qualified Private Real Estate Investment Trust No. 4	Real estate management	Korea	—	93.9%	December

1	Sum of the interests owned by the Controlling Company and subsidiaries.

Although the Controlling Company owns less than 50% interest in Nasmedia, Co., Ltd., KTCS Corporation and KTIS Corporation, Millie Seojae, and GENIE Music Corporation these entities are consolidated as the Controlling Company can exercise the majority of the voting rights in its decision-making process at all times considering voting patterns at previous shareholders’ meetings.

3	Although the Controlling Company owns less than 50 % interest in, Juice Inc., this entity is consolidated as the Controlling Company holds the majority of the voting right based on an agreement with other investors.

Although the Controlling Company owns less than 50% interest in K-Realty Qualified Private Real Estate Investment Trust No. 1, these entities are consolidated by comprehensively considering the criteria for determining control, such as ‘power’, ‘variable profit’, and ‘relationship between power and variable profit’, rather than simply judging by the interests owned by the company.

5	The number of treasury stocks held by subsidiaries are deducted from the total number of shares when calculating the controlling percentage interest.

F-17

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2) Changes in Scope of Consolidation

Subsidiaries newly included and excluded in the consolidation during the year ended December 31, 2023:


Changes	Location	Name of subsidiary	Reason
Included	Korea	KD Living, Inc.	Transferred 1
Included	Vietnam	KT HEALTHCARE VINA COMPANY LIMITED	Newly established
Included	Korea	K-Realty Qualified Private Real Estate Investment Trust No. 1	Transferred 2
Included	Vietnam	AQUA RETAIL VIETNAM COMPANY LIMITED	Newly established
Included	Korea	K-Realty Qualified Private Real Estate Investment Trust No. 4	Newly established
Excluded	United Arab Emirates	Epsilon M E A General Trading LLC	Liquidated
Excluded	Korea	Alpha DX Solution Co., Ltd.	Merged
Excluded	Korea	KT Strategic Investment Fund No.2	Liquidated
Excluded	Korea	LS Marine Solution Co., Ltd. (formerly KT Submarine Co., Ltd.)	Excluded 3
Excluded	Korea	KT-Michigan Global Contents Fund	Liquidated
Excluded	Russia	KT Primorye IDC LLC	Liquidated

1	The entity has been reclassified from a joint venture to a consolidated entity.

3	Due to the loss of control by the parent company, the entity has been reclassified from a subsidiary to an associate company.

F-18

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(3)

Summarized information for consolidated subsidiaries as at and for the years ended December 31, 2021, 2022 and 2023 is as follows


(In millions of Korean won)	December 31, 2021 3
	Total assets		Total liabilities		Operating revenues 3		Profit (loss) for the year 3
KT Linkus Co., Ltd	￦	54,219	￦	53,316	￦	81,434	￦	(3,095	)
KT Submarine Co., Ltd.		110,390		10,736		31,374		(3,183	)
KT Telecop Co., Ltd.		363,224		233,797		515,456		3,985
KT Alpha Co., Ltd. (KT Hitel Co., Ltd.)		390,671		172,767		471,870		(8,692	)
KT Service Bukbu Inc.		59,341		54,070		231,602		1,128
KT Service Nambu Inc.		62,513		52,695		271,174		1,430
BC Card Co., Ltd. 1		3,933,427		2,481,004		3,580,970		120,308
H&C Network Co., Ltd. 1		88,616		4,993		227,604		11,995
Nasmedia Co., Ltd. 1		490,394		268,618		125,876		27,120
KTDS Co., Ltd. 1		341,358		199,831		632,899		21,464
KT M&S Co., Ltd.		241,377		203,051		710,634		3,496
KT MOS Bukbu Co., Ltd.		32,511		25,402		70,212		1,637
KT MOS Nambu Co., Ltd.		36,741		26,053		71,940		2,016
KT Skylife Co., Ltd. 1		1,275,645		469,694		772,950		62,309
KT Estate Inc. 1		2,370,940		791,884		577,578		213,203
KTGDH Co., Ltd.		11,464		1,560		4,423		553
KT Sat Inc.		593,616		34,169		174,750		20,830
KT Sports Inc.		29,524		19,740		67,612		(2,039	)
KT Music Contents Fund No.2		14,985		278		253		(30	)
KT-Michigan Global Contents Fund		3,552		112		13,592		10,032

KT M Mobile Inc.		144,175		40,749		204,641		5,918
KT Investment Co., Ltd. 1		87,366		66,108		21,040		(697	)
KTCS Corporation 1		416,750		234,172		968,499		19,034
KTIS Corporation		369,361		177,619		487,801		24,944
Next Connect PFV Inc.		518,441		167,963		—		(6,519	)
KT Japan Co., Ltd. 1		1,474		2,633		1,298		(142	)
KT America, Inc.		4,884		101		6,508		201
KT Rwanda Networks Ltd. 2		125,860		236,389		23,328		(28,770	)
AOS Ltd. 2		11,539		2,812		6,942		823
KT Hong Kong Telecommunications Co., Ltd.		6,613		1,346		18,825		1,313
KT Hopemate 1		6,311		2,978		12,538		116
KT Engineering Co., Ltd. (KT ENGCORE Co., Ltd.)		185,850		144,832		284,998		366
KT Studio Genie Co., Ltd. 1,		648,534		276,933		90,047		(16,443	)
Lolab Co., Ltd.		26,726		897		2,107		(134	)
East Telecom LLC 1		35,904		22,088		11,960		2,487
KT ES Pte. Ltd. 1		240,331		80,597		15,157		(6,355	)
KT Philippines		3,641		1,243		—		—
Altimedia Corporation 1		32,338		9,742		6,968		1,037

1	These companies are the intermediate controlling companies of other subsidiaries and the above financial information is from their consolidated financial statements.

2	Convertible preferred stock issued by subsidiaries as of the end of the reporting period is included in liabilities.

3	Profit or loss is included from the date of acquisition of control to the end of the reporting period.

F-19

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023



(in millions of Korean won)	December 31, 2022 3
	Total assets		Total liabilities		Operating revenues 3		Profit (loss) for the year 3
KT Linkus Co., Ltd.	￦	47,734	￦	47,498	￦	76,135	￦	(614	)
KT Submarine Co., Ltd.		120,255		7,884		42,848		(12,126	)
KT Telecop Co., Ltd.		370,004		230,965		517,406		4,267
KT Alpha Co., Ltd . 1 (KT Hitel Co., Ltd.)		406,236		172,211		516,737		13,115
KT Service Bukbu Co., Ltd.		74,673		65,820		252,304		3,227
KT Service Nambu Co., Ltd.		80,450		66,479		301,720		3,067
BC Card Co., Ltd. 1		5,666,075		4,109,200		3,897,090		148,341
H&C Network		82,737		6,640		27,392		992
Nasmedia Co., Ltd. 1		516,945		275,730		153,210		27,691
KTDS Co., Ltd. 1		401,932		228,474		723,161		30,941
KT M&S Co., Ltd.		255,310		204,336		730,802		8,105
KT MOS Bukbu Co., Ltd.		38,684		22,553		83,085		4,607
KT MOS Nambu Co., Ltd.		42,011		25,416		83,330		5,035
KT Skylife Co., Ltd. 1		1,359,166		503,679		1,038,468		20,941
KT Estate Inc. 1		2,480,333		833,842		478,188		58,780
KT GDH Co., Ltd.		12,059		1,596		4,323		451
KT Sat Co., Ltd.		677,980		89,644		185,313		28,073
KT Sports Co., Ltd.		28,220		15,461		65,350		(7,302	)
KT Music Contents Fund No.2		15,718		277		1,040		735
KT-Michigan Global Content Fund		2,371		27		33		(1,095	)
KT M Mobile Co., Ltd.		152,114		49,816		262,918		4,731
KT Investment Co., Ltd. 1		103,354		79,182		15,136		2,840
KTCS Corporation 1		419,726		228,618		1,031,010		17,634
KTIS Corporation		396,208		199,204		536,229		15,917
Next Connect PFV		624,734		277,967		3		(3,712	)
KT Japan Co., Ltd. 1		1,888		3,141		3,263		226
KT America, Inc.		5,945		843		8,070		37
KT Rwanda Networks Ltd. 2		126,721		267,369		30,834		(27,467	)
AOS Ltd. 2		10,972		905		8,049		1,274
KT Hong Kong Telecommunications Co., Ltd.		10,505		4,768		20,413		51
KT Huimangjieum 1		6,984		2,582		22,860		494
KT Engineering Co., Ltd. (KT ENGCORE Co., Ltd.)		141,463		89,853		258,435		10,302
KT Studio Genie Co., Ltd. 1		987,270		268,911		723,580		189,498
Lolab Co., Ltd.		35,091		17,247		74,881		(7,985	)
East Telecom LLC 1		42,691		21,645		27,030		6,419
KT ES Pte. Ltd. 1		240,721		88,640		78,815		(23,957	)
KTP SERVICES INC.		3,832		2,044		776		(255	)
Altimedia Corporation 1		44,861		15,777		47,203		6,035
KT RUS LLC 1		967		16		5		(871	)
KT DX Vietnam Company Limited		1,815		6		—		26
kt cloud Co., Ltd. 1		1,348,684		245,872		432,118		14,712

1	These companies are the intermediate controlling companies of other subsidiaries and the above financial information is from their consolidated financial statements.

2	Convertible preferred stock issued by subsidiaries as of the end of the reporting period is included in liabilities.

3	Profit or loss is included from the date of acquisition of control to the end of the reporting period.

F-20

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


(in millions of Korean won)	December 31, 2023 3
	Total assets		Total liabilities		Operating revenues		Profit (loss) for the year
KT Linkus Co., Ltd.	￦	64,178	￦	63,452	￦	81,645	￦	821
KT Telecop Co., Ltd.		375,596		235,947		527,015		5,728
KT Alpha Co., Ltd.		443,639		191,254		437,308		19,352
KT Service Bukbu Co., Ltd.		63,760		55,360		242,119		1,212
KT Service Nambu Co., Ltd.		71,576		58,745		291,170		1,354
BC Card Co., Ltd. 1		6,352,878		4,722,432		4,027,450		76,545
H&C Network		81,107		4,863		27,205		1,814
Nasmedia Co., Ltd. 1		513,311		262,336		147,934		17,703
KTDS Co., Ltd. 1		393,667		202,067		727,477		33,971
KT M&S Co., Ltd.		258,477		209,075		695,856		3,783
KT MOS Bukbu Co., Ltd.		50,750		28,431		101,428		8,457
KT MOS Nambu Co., Ltd.		46,839		26,012		101,422		5,749
KT Skylife Co., Ltd. 1		1,220,842		479,369		1,034,342		(109,407	)
KT Estate Inc. 1		2,746,546		1,121,970		511,018		871
KT GDH Co., Ltd.		7,760		1,501		4,346		648
KT Sat Co., Ltd.		699,607		88,524		182,274		30,502
KT Sports Co., Ltd.		26,615		11,299		66,309		(12,386	)
KT Music Contents Fund No.2		5,558		1,772		534		(992	)
KT M Mobile Co., Ltd.		176,838		69,317		301,049		5,605
KT Investment Co., Ltd. 1		83,638		57,420		24,976		2,180
KTCS Corporation 1		434,900		234,850		1,035,911		15,804
KTIS Corporation		447,609		243,519		593,162		13,922
Next Connect PFV		946,687		629,809		—		(29,889	)
KT Japan Co., Ltd. 1		2,015		3,341		2,793		(110	)
KT America, Inc.		6,013		701		8,928		133
KT Rwanda Networks Ltd. 2		134,847		313,787		26,788		(57,628	)
AOS Ltd. 2		10,763		1,983		8,287		128
KT Hong Kong Telecommunications Co., Ltd.		11,142		5,121		19,373		143
KT Huimangjieum 1		8,073		2,715		17,687		1,012
KT Engineering Co., Ltd.		160,243		104,005		262,063		5,327
KT Studio Genie Co., Ltd. 1		989,187		259,413		542,955		13,507
Lolab Co., Ltd.		42,744		37,838		173,035		(12,938	)
East Telecom LLC 1		48,483		22,632		30,350		7,723
KT ES Pte. Ltd. 1		117,009		90,392		87,865		(124,850	)
KTP SERVICES INC.		2,967		919		671		235
Altimedia Corporation 1		48,381		12,374		45,035		7,352
KT RUS LLC		501		10		1		(378	)
KT DX Vietnam Company Limited		1,694		102		82		(207	)
KT Cloud Co., Ltd. 1		1,983,972		503,241		679,825		63,956
KT Healthcare Vina Co., Ltd.		12,730		439		—		(721	)
K-Realty Qualified Private Real Estate Investment Trust No. 1		80,266		50,693		4,682		(1,037	)
AQUA RETAIL VIETNAM COMPANY LIMITED		1,202		62		16		(248	)

1	These companies are the intermediate controlling companies of other subsidiaries and the above financial information is from their consolidated financial statements.

2	Convertible preferred stock issued by subsidiaries as of the end of the reporting period is included in liabilities.

3	Profit or loss is included from the date of acquisition of control to the end of the reporting period.

F-21

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

2	Material Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.

These

policies have been consistently applied to all the years presented, unless otherwise stated.

2.1

Basis of Preparation

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The financial statements have been prepared on a historical cost basis, except for the following:

•

Certain financial assets and liabilities (including derivative instruments)

•

Defined benefit pension plans – plan assets measured at fair value

The preparation of the consolidated financial statements requires the use of critical accounting estimates. Management also needs to exercise judgement in applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3.

2.2

Changes in Accounting Policy and Disclosures

(a) New and amended standards and interpretations adopted by the Group

The Group has applied the following standards and interpretations for the first time for their annual reporting period commencing January 1, 2023.

- IFRS 17 ‘Insurance Contract’ (Amendment)

IFRS 17, which replaces IFRS 4 “Insurance Contracts,” establishes principles for recognition, measurement, and disclosure of insurance contracts, and is mainly characterized by measuring the current cost of insurance liabilities, recognizing insurance returns based on accrual accounting assumption, and marking the distinction between insurance gains and losses on investment.

The Group does not have any contracts that meet the definition of an insurance contract under IFRS 17.

- IAS 1

Presentation of Financial Statements

and

IFRS Practice Statement 2 Making Materiality Judgements

– Disclosure of Accounting Policies (Amendment)

The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The amendments replace all instances of the term ‘significant accounting policies’ with ‘material accounting policy information’. Accounting policy information is material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements.

F-22

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material.

The IASB has also developed guidance and examples to explain and demonstrate the application of the ‘four-step materiality process’ described in IFRS Practice Statement 2.

- IAS 1

Presentation of Financial Statements

– Disclosure of financial liabilities with condition to adjust exercise price (Amendment)

The amendments require disclosure of valuation gains or losses (limited to those recognized in the profit or loss) of the conversion options or warrants (or financial liabilities including them), if all or part of the financial instrument with exercise price that is adjusted depending on the issuer’s share price change is classified as financial liability as defined in paragraph of IAS 32 – Financial Instrument: Presentation.

- IAS 8

Accounting Polices, Changes in Accounting Estimates and Errors

– Definition of Accounting Estimates (Amendment)

The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”. The definition of a change in accounting estimates was deleted.

- IAS 12

Income Taxes

– Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendment)

The amendments introduce a further exception from the initial recognition exemption. Under the amendments, an entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences.

Depending on the applicable tax law, equal taxable and deductible temporary differences may arise on initial recognition of an asset and liability in a transaction that is not a business combination and affects neither accounting nor taxable profit. For example, this may arise upon recognition of a lease liability and the corresponding right-of-use asset applying IFRS 16 at the commencement date of a lease.

Following the amendments to IAS 12, an entity is required to recognise the related deferred tax asset and liability, with the recognition of any deferred tax asset being subject to the recoverability criteria in IAS 12.

- IAS 12

Income Taxes

– International Tax Reform: Pillar 2 Best Regulations (Amendment)

The amendment clarifies that IAS 12

Income Taxes

’ is applied to corporations arising from tax laws enacted or practically enacted to implement the Pillar 2 best rules issued by the Organization for Economic Cooperation and Development (OECD).

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Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

However, by introducing a temporary exception to the deferred tax accounting requirements of IAS 12

Income Taxes

, the group does not recognize deferred tax assets and liabilities associated with Pillar 2 Income Taxes and do not disclose information about them. The group also discloses that the exception has been applied in accordance with this amendment, and that the current income tax expense (revenue) related to Pillar 2 corporate tax is disclosed separately.

There is no significant impact of the amendments listed above on the consolidated financial statements.

(b)

New standards and interpretations not yet adopted by the Group

The following new accounting standards and interpretations that have been published are not mandatory for December 31, 2023 reporting periods and have not been early adopted by the Group.

- IAS 1

Presentation of Financial Statements

– Classification of Liabilities as Current or Non-current (Amendment to 2020)

The amendments clarify that the classification of liabilities as current and non-current is based on rights that are existing at the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period, and introduce a definition of ‘settlement’ to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

- IAS 1

Presentation of Financial Statements

– Non-current liabilities with agreements (Amendment to 2023)

The amendments regulate that only certain conditions in the borrowing arrangement (referred to as the “Agreement”) that must be observed before the end of the reporting period affect the right of the entity to defer repayment of the liability for at least 12 months after the reporting period. Even if compliance with the agreement is assessed only after the reporting period, these arrangements affect the existence of the right as of the end of the reporting period.

It also regulates that arrangements that must be observed only after the reporting period do not affect the right to defer settlement. However, if the Group’s right to defer settlement of a liability depends on the agreement that complies with within 12 months of the reporting period, disclosing the information to help users of financial statements understand the risk that the liability could be repaid within 12 months of the reporting period. This information includes information about the agreements (including the nature of the agreements, when the Group is required to comply), the carrying amount of the relevant liabilities, and the facts and circumstances indicating that they may be difficult to satisfying with.

The above amendments are applied retrospectively for annual reporting periods beginning on or after 1 January 2024, with early application permitted.

- IAS 7 ‘Cash Flow Statement’ and ‘Financial Instruments Disclosure’- Supplier Financial Agreement(Amendment)

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Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

The amendment adds the purpose of disclosure in IAS 7 ‘Cash Flow Statement’, users of financial statements should disclose information about supplier financial agreements so that they can assess the affect of them on the Group’s liabilities and cash flows. In addition, supplier financial agreements were added as an example of the requirement to amend IAS 7 to disclose information about exposure to liquidity risk concentration.

The term ‘supplier financial agreements’ is not defined; instead, the amendment presents the nature of the arrangement that should be informed.

For achieving the purpose of disclosure, the following information on supplier financial agreements must be disclosed in an integrated manner.

•

the terms and conditions of an agreement

•

The carrying amount of financial liabilities corresponding to the supplier’s financial agreement and the items displayed in the statement of financial position in relation to the financial liabilities

•

The carrying amount corresponding to the portion of the financial liabilities that the supplier has already received from the financial provider and the items displayed in the statement of financial position in relation to the financial liabilities

•

The scope of payment date for financial liabilities corresponding to supplier financial agreements and the scope of payment date for comparable purchase liabilities not corresponding to supplier financial agreements

•

Types of non-cash changes in the carrying amount of financial liabilities corresponding to supplier financial agreements and their impact

•

Liquidity risk information

The above amendments are applied retrospectively for annual reporting periods beginning on or after 1 January 2024, with early application permitted.

- IFRS 16 ‘Lease’ – Lease liabilities arising from leaseback (Amendment)

The amendment adds a follow-up measurement requirement for leaseback that is accounted for as sales by applying IFRS 15 ‘revenue from contracts with customers’. The amendment requires the seller to calculate a ‘lease fee’ or an ‘modified lease fee’ in such a way that the seller-less user does not recognize any difference or gain for the right to use that the seller-less user continues to hold after the lease commencement date.

The above amendments are applied retrospectively for annual reporting periods beginning on or after 1 January 2024, with early application permitted.

- IAS 1 Presentation of Financial Statements (revised in 2023) – Disclosure of Virtual Assets

The amendments, in addition to the disclosure requirements required by other Standards for transactions related to virtual assets, define the requirements for disclosure in each case: 1) holding virtual assets; 2) holding virtual assets on behalf of customers; and 3) issuing virtual assets.

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Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

If a virtual asset is held, information on the general information of the virtual asset, the applied accounting policy, the acquisition path, acquisition cost, and fair value of each virtual asset should be disclosed. In addition, when a virtual asset is issued, the performance status related to the issued virtual asset, the moment and the exposure of revenue recognition of the sold virtual asset, the quantity of virtual assets held after issuance, and important contract details should be disclosed.

The above amendments are applied retrospectively for annual reporting periods beginning on or after 1 January 2024, with early application permitted.

- IFRS 18 Presentation and Disclosure in financial statements (Amendment)

The purpose of the amendment is to set out requirements for the presentation and disclosure of information in general purpose financial statements (financial statements) to help ensure they provide relevant information that faithfully represents an entity’s assets, liabilities, equity, income and expenses. IFRS 18 applies to all financial statements that are prepared and presented in accordance with International Financial Reporting Standards and replaces IAS 1 Presentation of Financial Statements. The key changes included in the amendments include (1) an introduction of a defined structure for the statement of profit or loss including categories for classifying incomes and expenses, subtotals for operating profit and profit before financing and income taxes, (2) an introduction of specific disclosure requirements related to the statement of profit or loss which include but are not limited to management-defined performance measures, (3) enhanced guidance on the principles of aggregation and disaggregation which focus on grouping items based on their shared characteristics and (4) some other limited changes to presentation and disclosures in the financial statements.

The above amendments are applied retrospectively for annual reporting periods beginning on or after 1 January 2027, with early application permitted.

The Group is reviewing the impact of the above-listed amendments on the consolidated financial statements.

2.3

Consolidation

The Group has prepared the consolidated financial statements in accordance with IFRS 10

Consolidated Financial Statements

(a) Subsidiaries

Subsidiaries are all entities (including special purpose entities (“SPEs”)) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred is measured at the fair values of the assets transferred, and identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis

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Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. All other non-controlling interests are measured at fair values, unless otherwise required by other standards. Acquisition-related costs are expensed as incurred.

The excess of consideration transferred, amount of any non-controlling interest in the acquired entity and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recoded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in the profit or loss as a bargain purchase.

Intercompany transactions, balances and unrealized gains on transactions among group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(b) Changes in ownership interests in subsidiaries without loss of control

Any differences between the amount of the adjustment to non-controlling interest that do not result in loss of control and any consideration paid or received is recognized in a separate reserve within equity attributable to owners of the Controlling Company.

When the Group ceases to have control over a subsidiary, any retained interest in the subsidiary is remeasured to its fair value with the change in carrying amount recognized in profit or loss.

(d) Associates

Associates are entities over which the Group has significant influence but does not possess control or joint control. Investments in associates are accounted for using the equity method of accounting, after initially being recognized at cost. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. If the Group’s share of losses of an associate equals or exceeds its interest in the associate (including long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognizing its share of further losses. After the Group’s interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. If there is an objective evidence of impairment for the investment in the associate, the Group recognizes the difference between the recoverable amount of the associate and its book amount as impairment loss. If an associate uses accounting policies other than those of the Group for transactions and events in similar circumstances, if necessary, adjustments shall be made to make the associate’s accounting policies conform to those of the Group when the associate’s financial statements are used by the Group in applying the equity method.

(e) Joint arrangements

A joint arrangement, wherein two or more parties have joint control, is classified as either a joint operation or a joint venture. A joint operator recognizes its direct right to the assets, liabilities,

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Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

revenues, and expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues, and expenses. A joint venture has rights to the net assets relating to the joint venture and accounts for that investment using the equity method.

2.4

Segment Reporting

Information of each operating segment is reported in a manner consistent with the business segment reporting provided to the chief operating decision-maker (Note 34). The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

2.5

Foreign Currency Translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which each entity operates (the “functional currency”). The consolidated financial statements are presented in Korean won, which is the Controlling Company’s functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss. They are deferred in other comprehensive income if they relate to qualifying cash flow hedges and qualifying effective portion of net investment hedges, or are attributable to monetary part of the net investment in a foreign operation.

Foreign exchange gains and losses that relate to financial instruments are presented in the statement of profit or loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss within ‘other income’ or ‘other expense’.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities, such as equities held at fair value through profit or loss, are recognized in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets, such as equities classified as available-for-sale financial assets, are recognized in other comprehensive income

2.6

Financial Assets

(a) Classification

The Group classifies its financial assets in the following measurement categories:

•

those to be measured at fair value through profit or loss

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Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

•

those to be measured at fair value through other comprehensive income

•

those to be measured at amortized cost

The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. The Group reclassifies debt investments when, and only when, its business model for managing those assets changes.

For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. Changes in fair value of the investments in equity instruments that are not accounted for as other comprehensive income are recognized in profit or loss.

(b) Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

A. Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. The Group classifies its debt instruments into one of the following three measurement categories:

•

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included in ‘finance income’ using the effective interest rate method.

•

Fair value through other comprehensive income: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income. Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment loss (and reversal of impairment loss), interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss. Interest income from these financial assets is included in ‘finance income’

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Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

using the effective interest rate method. Foreign exchange gains and losses are presented in ‘finance income’ or ‘finance costs’ and impairment loss in ‘finance costs’ or ‘operating expenses’.

•

Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or fair value through other comprehensive income are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss and presented net in the statement of profit or loss within ‘finance income’ or ‘finance costs’ in the period in which it arises.

B. Equity instruments

The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividend income from such investments continue to be recognized in profit or loss as ‘finance income’ when the Group’s right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognized in ‘finance income’ or ‘finance costs’ in the statement of profit or loss as applicable. Impairment loss (reversal of impairment loss) on equity investments, measured at fair value through other comprehensive income, are not reported separately from other changes in fair value.

The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortized cost and fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables and lease receivables, the Group applies the simplified approach, which requires expected lifetime credit losses to be recognized from initial recognition of the receivables.

(d) Recognition and derecognition

Regular way purchases and sales of financial assets are recognized or derecognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

If a transfer does not result in derecognition because the Group has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received.

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December 31, 2021, 2022 and 2023

(e) Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount reported in the statements of financial position where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.

2.7

Derivative Instruments

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting treatment for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group has hedge relationships and designates certain derivatives as:

•

hedges of a particular risk associated with the cash flows of recognized assets and liabilities and highly probable forecast transactions (cash flow hedges)

At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items.

The fair values of derivative financial instruments designated in hedge relationships are disclosed in Note 37.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. A non-derivative financial asset and a non-derivative financial liability is classified as a current or non-current based on its expected maturity and its settlement, respectively.

The effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in the cash flow hedge reserve within equity to the limit of the cumulative change in fair value (present value) of the hedge item (the present value of the cumulative change in the future expected cash flows of the hedged item) from the inception of the hedge. The ineffective portion is recognized in ‘finance income (costs)’.

Amounts of changes in fair value of effective hedging instruments accumulated in equity are recognized as ‘finance income (costs)’ for the periods when the corresponding transactions affect profit or loss.

When a hedging instrument expires, or is sold, terminated, exercised, or when a hedge no longer meets the criteria for hedge accounting, any accumulated cash flow hedge reserve at that time remains in equity until the forecast transaction occurs, resulting in the recognition of a non-financial asset such as inventory. When the forecast transaction is no longer expected to occur, the cash flow hedge reserve and deferred costs of hedging that were reported in equity are immediately reclassified to profit or loss.

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Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

2.8

Trade Receivables

Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components when they are recognized at fair value. Trade receivables are subsequently measured at amortized cost using the effective interest method, less loss allowance. See Note 6 for further information about the Group’s accounting treatment for trade receivables and Note 2.6 (c) for a description of the Group’s accounting policy on impairment.

2.9

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the moving average method, except for inventories in-transit (specific identification method).

2.10

Property and Equipment

Property and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditures that is directly attributable to the acquisition of the items.

Depreciation of all property and equipment, except for land, is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives as follows:


		Useful Life
Buildings		5 – 40 years
Structures		5 – 40 years
Machinery and equipment (Telecommunications equipment and others)		2 – 40 years
Vehicles		4 – 10 years
Tools		2 – 6 years
Office equipment		2 – 8 years

The depreciation method, residual values, and useful lives of property and equipment are reviewed at the end of each reporting period and, if appropriate, accounted for as changes in accounting estimates.

2.11

Investment Property

Real

estate

held for rental income or investment gains is classified as investment property and right-of-use asset. An investment property is measured initially at its cost. After recognition as an asset, investment property is carried at cost less accumulated depreciation and impairment losses. Investment property, except for land, is depreciated using the straight-line method over their useful lives from 5 to 40 years.

2.12

Intangible Assets

(a) Goodwill

Goodwill is measured as explained in Note 2.3 (a) and goodwill arising from acquisition of subsidiaries and businesses is included in intangible assets. Goodwill is tested annually for

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December 31, 2021, 2022 and 2023

impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of subsidiaries and business include the carrying amount of goodwill relating to the subsidiaries and businesses sold.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs, or group of CGUs, that is expected to benefit from the synergies of the combination. Goodwill is monitored at the operating segment level.

(b) Intangible assets excluding goodwill

Intangible assets, except for goodwill, are initially recognized at its historical cost, and carried at cost less accumulated amortization and accumulated impairment losses. Membership rights (condominium membership and golf membership), subscription rights, broadcast license, facility-use rights, and transportation rights that have indefinite useful life are not subject to amortization because there is no foreseeable limit to the period over which the assets are expected to be utilized

The Group amortizes intangible assets with a limited useful life using the straight-line method over the following periods:


	Useful Life
Development costs		3 – 10 years
Software		3 – 10 years
Frequency usage rights		5 – 10 years
Others 1		1 – 50 years

Membership rights (condominium membership and golf membership), subscription rights, broadcast license, facility usage rights and transportation license included in others are classified as intangible assets with indefinite useful life.

2.1

Borrowing Costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Investment income earned on the temporary investment of specific borrowings on qualifying assets is deducted from the borrowing costs eligible for capitalization. Other borrowing costs are expensed in the period in which they are incurred.

2.1

Government Grants

Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Government grants related to assets are presented in the statement of financial position by setting up the grant as deferred income that is recognized in profit or loss on a systematic basis over the useful life of the asset. Grants related to income are deferred and are presented as a credit in the statement of profit or loss within ‘other income’.

2.1

Impairment of Non-Financial Assets

Goodwill and intangible assets with indefinite useful life are tested annually for impairment at the end of each reporting period. If certain assets are deemed to be impaired, their recoverable

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December 31, 2021, 2022 and 2023

amount is estimated in order to determine the impairment loss. The Group estimates the recoverable amount for each asset, and, in cases when the recoverable amount cannot be estimated for an asset, the recoverable amount of the cash generating unit to which the asset belongs is estimated. Corporate assets are allocated to individual cash generating units on a reasonable and consistent basis and if they cannot be allocated to individual cash generating units, they are allocated to the smallest group of cash generating units on a reasonable and consistent basis. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount (higher of its fair value less costs of disposal and value in use). Impairment loss on non-financial assets other than goodwill are evaluated for reversal at the end of each reporting period.

2.1

Trade and Other Payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of reporting period which are unpaid. Trade and other payables are presented as current liabilities, unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.

2.1

Financial Liabilities

(a) Classification and measurement

The Group’s financial liabilities at fair value through profit or loss are financial instruments held for trading. A financial liability is held for trading if it is incurred principally for the purpose of repurchasing in the near term. Derivatives that are not designated as hedging instruments or derivatives separated from financial instruments containing embedded derivatives are also categorized as held for trading.

The Group classifies non-derivative financial liabilities, except for financial liabilities at fair value through profit or loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not qualify for derecognition, as financial liabilities carried at amortized cost and present as ‘trade payables and other payables’, ‘borrowings’ and ‘other financial liabilities’ in the statement of financial position.

Borrowings are initially recognized as the amount obtained by subtracting the transaction cost incurred from the fair value and is then measured as amortized cost. The difference between the consideration received (net of transaction cost) and the redemption amount is recognized as profit or loss over the period using the effective interest rate method. Fees paid to receive the borrowing limit are recognized as transaction costs for loans to the extent that they are likely to be borrowed as part or all of the borrowing limit. In this case, the fee will be deferred until the draw-down occurs. There is a high possibility that borrowings will be executed as part or all of the borrowing limit agreement (relevant fees to the extent that there is no evidence) are recognized as assets as advance payments for liquidity services and amortized over the relevant borrowing limit period.

Preferred shares that require mandatory redemption at a particular date are classified as liabilities. Interest expenses on these preferred shares using the effective interest method are recognized in the statement of profit or loss as ‘finance costs’, together with interest expenses recognized from other financial liabilities.

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Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(b) Derecognition

Financial liabilities are removed from the statement of financial position when it is extinguished; for example, when the obligation specified in the contract is discharged or cancelled or expired or when the terms of an existing financial liability are substantially modified. The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

The Group’s financial liabilities at fair value through profit or loss are financial instruments held for trading and financial liabilities designated as at fair value through profit or loss. A financial liability is held for trading if it is incurred principally for the purpose of repurchasing in the near term. A derivative that is not a designated as hedging instruments and an embedded derivative that is separated are also classified as held for trading. Financial liabilities designed as at fair value through profit or loss are structured financial liabilities containing embedded derivatives issued by the Group.

2.18

Financial Guarantee Contracts

Financial guarantee contracts are recognized as a financial liability at the time the guarantee is issued. The liability is initially measured at fair value, subsequently at the higher of the following amount, and the related liability is recognized as ‘other financial liabilities’ in the consolidated statement of financial position:

•

the amount determined in accordance with the expected credit loss model under IFRS 9

Financial Instruments

•

the amount initially recognized less, where appropriate, the cumulative amount of income recognized in accordance with IFRS 15

Revenue from Contracts with Customers

Compound Financial Instruments

Compound financial instruments are convertible notes that can be converted into equity instruments at the option of the holder.

The liability component of a compound financial instrument is recognized initially at the fair value of a similar liability that does not have an equity conversion option, and subsequently measured at amortized cost until extinguished on conversion or maturity of the bonds. The equity component is recognized initially on the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

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December 31, 2021, 2022 and 2023

2.20

Employee Benefits

(a) Post-employment benefits

The Group operates both defined contribution and defined benefit pension plans.

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The contributions are recognized as employee benefit expenses when an employee has rendered service.

A defined benefit plan is a pension plan that is not a defined contribution plan. Generally, post-employment benefits are payable after the completion of employment, and the benefit amount depended on the employee’s age, periods of service or salary levels. The liability recognized in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service costs.

(b) Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits at the earlier of the following dates: when the entity can no longer withdraw the offer of those benefits or when the entity recognizes costs for a restructuring.

Certain entities within the Group provide long-term employee benefits that are entitled to employees with service period for ten years and above. The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit pension plans. The Group recognizes service cost, net interest on other long-term employee benefits and remeasurements as profit or loss for the year. These liabilities are valued annually by an independent qualified actuary.

2.2

Share-Based Payments

Equity-settled share-based payment is recognized at fair value of equity instruments granted, and employee benefit expense is recognized over the vesting period. At the end of each period, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

The acquiree may have outstanding share-based payment transactions that the acquirer does not exchange for its share-based payment transactions. If vested, those acquiree share-based payment transactions are part of the non-controlling interest in the acquiree and are measured at their market-based measure. If unvested, the market-based measure of unvested share-based payment transactions is allocated to the non-controlling interest on the basis of the ratio of the portion of the vesting period completed to the greater of the total vesting period and the original vesting period of the share-based payment transaction. The balance is allocated to post-combination service.

2.22

Provisions

Provisions for service warranties, recoveries, litigations and claims, and others are recognized when the Group presently hold legal or constructive obligation as a result of past events, and when it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period, and the increase in the provision due to the passage of time is recognized as interest expense.

2.2

Leases

(a) Lessee

The Group leases various repeater server racks, offices, communication line facilities, machinery, cars, and others.

Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

•

Fixed payments (including in-substance fixed payments), less any lease incentives receivable

•

Variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date

•

Amounts expected to be payable by the Group (the lessee) under residual value guarantees

•

The exercise price of a purchase option if the Group (the lessee) is reasonably certain to exercise that option, and

•

Payments of penalties for terminating the lease, if the lease term reflects the Group (the lessee) exercising that option

Measurement of lease liability also includes payments to be made in optional periods if the lessee is reasonably certain to exercise an option to extend the lease.

The Group determines the lease term as the non-cancellable period of a lease, together with both (a) periods covered by an option to extend the lease if the lessee is reasonably certain to exercise

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

that option; and (b) periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option. When the lessee and the lessor each has the right to terminate the lease without permission from the other party, the Group should consider a termination penalty in determining the period for which the contract is enforceable.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used, which is the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.

Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period in order to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

•

the amount of the initial measurement of lease liability

•

any lease payments made at or before the commencement date less any lease incentives received

•

any initial direct costs (leasehold deposits)

•

restoration costs

The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less, such as vehicles, machinery, and others. Low-value assets are comprised of tools, office equipment, and others.

(b) Lessor

Lease income from operating leases where the Group is a lessor is recognized in income on a straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognized as expense over the lease term on the same basis as lease income. The respective leased assets are included in the statement of financial position based on their nature.

Extension and termination options are included in a number of property and equipment leases across the Group. These terms are used to maximize operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

Group and not by the respective lessor. Information on critical accounting estimates and assumptions related to the determination of the lease term is presented in Note 3.

2.24

Share Capital

The Controlling Company classifies ordinary shares as equity.

Where the Controlling Company purchases its own shares, the consideration paid, including any directly attributable incremental costs, is deducted from equity until the share are cancelled or reissued. When these treasury shares are reissued, any consideration received is included in equity attributable to the equity holders of the Controlling Company.

2.25

Revenue Recognition

(a) Identifying performance obligations

The Group mainly provides telecommunication services and sells handsets. The Group identifies performance obligations with a customer such as providing telecommunication services, selling handsets, and others. Revenue from handsets is recognized when a performance obligation is satisfied by transferring promised goods to customers, and the revenue from telecommunication services is recognized over the estimated contract periods of each services by transferring promised services to customers.

(b) Allocation the transaction price and revenue recognition

The Group allocates the transaction price to each performance obligation identified in the contract based on a relative stand-alone selling prices of the goods or services being provided to the customer. To allocate the transaction price to each performance obligation on a relative stand-alone price basis, the Group determines the stand-alone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and allocate the transaction price in proportion to those stand-alone selling price. The stand-alone selling price is the price at which the Group would sell a promised good or service separately to the customer. The best evidence of a stand-alone selling price is the observable price of a good or service when the Group sells that good or service separately in similar circumstances and to similar customers. The Group recognizes the allocated amount as contract assets or contract liabilities, and amortizes it through the remaining period which is adjusted in operating income.

The Group pays commission fees when new customers subscribe to telecommunication services. The incremental contract acquisition costs are those commission fees that the Group incurs to acquire a contract with a customer that would not have been incurred if the contract had not been acquired. The Group recognizes the incremental contract acquisition costs as an asset and amortizes it over the expected period of benefit. However, as a practical expedient, the Group may recognize the incremental contract acquisition costs as an expense when it is incurred if the amortization period of the asset is one year or less.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(d) Commission fees

Commission fees are recognized when it is probable that future economic benefits will flow to the entity and these benefits can be reliably measured. Revenues are measured at the fair value of the consideration received.

2.26

Current and Deferred Income Tax

The tax expense for the period consists of current and deferred tax. Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

The current income tax expense is measured at the amount expected to be paid to taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation, and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit or loss.

Deferred tax assets are recognized only if it is probable that future taxable amount will be available to utilize those temporary differences and losses.

The Group recognizes a deferred tax liability all taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint arrangements, except to the extent that the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. In addition, the Group recognizes a deferred tax asset for all deductible temporary differences arising from such investments to the extent that it is probable the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset when the Group has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the assets and settle the liability simultaneously.

2.2

Dividend

Dividend distribution to the Group’s shareholders is recognized as a liability in the financial statements in the period in which the dividends are approved by the Group’s shareholders.

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

2.28

Approval on Issuance of the Consolidated Financial Statements

The consolidated financial statements of 2023 were approved for issuance by the Board of Directors on April 11, 2024 and are subject to change with the approval of shareholders at their Annual General Meeting.

3	Critical Accounting Estimates and Assumptions

The preparation of financial statements requires the Group to make estimates and assumptions concerning the future. Management also needs to exercise judgement in applying the Group’s accounting policies. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. As the resulting accounting estimates will, by definition, seldom equal the actual results, it poses significant risk of resulting in a material adjustment.

Estimates and assumptions that have significant risks of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Additional information of significant judgement and assumptions of certain items are included in relevant notes.

3.1

Impairment of Non-Financial Assets (including Goodwill)

The Group determines the recoverable amount of a cash generating unit (CGU) based on fair value or value-in-use calculations to assess non-financial assets (including goodwill) for impairment (Note 12, 13).

3.2

Income Taxes

The Group’s taxable income generated from these operations are subject to income taxes based on tax laws and interpretations of tax authorities in numerous jurisdictions. There are many transactions and calculations for which the ultimate tax determination is uncertain (Note 29).

If certain portion of the taxable income is not used for investments or increase in wages or dividends in accordance with the

Tax System for Recirculation of Corporate Income,

the Group is liable to pay additional income tax calculated based on the tax laws. Accordingly, the measurement of current and deferred income tax is affected by the tax effects from the new tax system. As the Group’s income tax is dependent on the investments as well as wage increase, there is uncertainty in measuring the final tax effects(Note 29).

3.3

Fair Value of Financial Instruments

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period (Note 37).

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

3.4

Net Defined Benefit Liability

The present value of net defined benefit liability depends on a number of factors that are determined on an actuarial basis using a number of assumptions including the discount rate (Note 17).

3.5

Amortization of Contract Assets, Contract Liabilities and Contract Cost Assets

Contract assets, contract liabilities and contract cost assets recognized under the application of IFRS 15 are amortized over the expected periods of customer relationships. The estimate of the expected terms of customer relationship is based on the historical data. If management’s estimate changes, it may cause significant differences in the timing of revenue recognition and amounts recognized.

3.6

Critical Judgments in Determining the Lease Term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).

For leases of property, machinery, and communication line facilities, the following factors are normally the most relevant:

•

If there are significant penalties to terminate (or not extend), the Group is typically reasonably certain to extend (or not terminate).

•

If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain to extend (or not terminate).

•

Otherwise, the Group considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset.

Most extension options in offices, retail stores and vehicles leases have not been included in the lease liability, because the Group can replace the assets without significant cost or business disruption.

The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee.

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

4.	Financial Instruments by Category

(1) Financial instruments by category as

f December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022
Financial assets	Financial assets at amortized cost		Financial assets at fair value through profit or loss		Financial assets at fair value through other comprehensive income		Derivatives used for hedging		Total
Cash and cash equivalents	￦	2,449,062	￦	—	￦	—	￦	—	￦	2,449,062
Trade and other receivables		7,459,994		—		129,124		—		7,589,118
Other financial assets		1,060,058		1,064,856		1,508,192		190,830		3,823,936


(in millions of Korean won)	December 31, 2022
Financial liabilities	Financial liabilities at amortized cost		Financial liabilities at fair value through profit and loss		Derivatives used for hedging		Others		Total
Trade and other payables 1	￦	8,397,264	￦	—	￦	—	￦	—	￦	8,397,264
Borrowings		10,006,685		—		—		—		10,006,685
Other financial liabilities		246,606		141,280		33,555		—		421,441
Lease liabilities		—		—		—		1,172,038		1,172,038

1	Amounts related to employee benefit plans are included in Trade and other payables.


(in millions of Korean won)	December 31, 2023
Financial assets	Financial assets at amortized cost		Financial assets at fair value through profit or loss		Financial assets at fair value through other comprehensive income		Derivatives used for hedging		Total
Cash and cash equivalents	￦	2,879,554	￦	—	￦	—	￦	—	￦	2,879,554
Trade and other receivables		8,458,259		—		116,198		—		8,574,457
Other financial assets		1,385,921		939,661		1,680,168		159,211		4,164,961


(in millions of Korean won)	December 31, 2023
Financial liabilities	Financial liabilities at amortized cost		Financial liabilities at fair value through profit and loss		Derivatives used for hedging		Others		Total
Trade and other payables	￦	8,317,822	￦	—	￦	—	￦	—	￦	8,317,822
Borrowings		10,218,165		—		—		—		10,218,165
Other financial liabilities		915,185		136,106		24,547		—		1,075,838
Lease liabilities		—		—		—		1,179,909		1,179,909

(2) Gains or l

sses arising from financial instruments by category for the years ended December 31, 2021, 2022 and 2023, are as follows:

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


(in millions of Korean won)	2021			2022			2023
Financial assets at amortized cost
Interest income 1	￦	74,937		￦	144,505		￦	360,134
Gain on foreign currency transactions 4		12,826			23,824			22,782
Gain (loss) on foreign currency translation		2,911			(2,151	)		5,741
Gain (loss) on disposal		35			(81	)		(3,409	)
Loss on valuation		(110,286	)		(132,102	)		(172,966	)
Financial assets at fair value through profit or loss
Interest income 1		3,673			6,008			13,480
Dividend income 5		21,499			4,600			6,918
Gain (loss) on valuation 6		64,659			(29,282	)		(31,965	)
Gain on disposal		29,974			2,347			14,237
Gain on foreign currency transactions 4		—			1,100			—
Gain on foreign currency translation		17,794			13,711			3,396
Financial assets at fair value through other comprehensive income
Interest income 1		222,290			190,281			18,966
Dividend income 5		1,365			9,522			52,813
Loss on valuation		—			(61	)		—
Loss on disposal		(22,712	)		(62,183	)		(11,193	)
Other comprehensive income (loss) for the year 2		129,780			(158,574	)		121,805
Derivatives used for hedging
Gain on transactions		—			27,628			10,192
Gain on valuation 7		203,961			150,699			34,092
Other comprehensive income for the year 2		144,967			88,048			7,772


(in millions of Korean won)	2021			2022			2023
Reclassified to profit or loss from other comprehensive gain (loss) for the year 2,3		(143,305	)		(110,616	)		(29,178	)
Financial liabilities at amortized cost
Interest expense 1		(232,197	)		(275,302	)		(358,486	)
Gain on valuation 8		—			—			3,411
Loss on foreign currency transactions 4		(3,580	)		(34,574	)		(24,054	)
Loss on foreign currency translation		(201,623	)		(168,577	)		(93,004	)
Financial liabilities at fair value through profit or loss
Gain (loss) on valuation		42,447			30,031			(7,394	)
Gain on disposal Interest expense 1		2,136 —			— (4,046	)		4,788 (44	)
Gain (loss) on foreign currency transactions 4		(2	)		24			(5	)
Derivatives used for hedging
Loss on transactions		(6,208	)		(1,291	)		—
Gain (loss) on valuation		(7,206	)		(17,237	)		11,503
Other comprehensive income (loss) for the year 2		(3,112	)		(23,957	)		7,557
Reclassified to profit or loss from other comprehensive income for the year 2,3		6,722			15,195			(8,764	)
Lease liabilities
Interest expense 1		(36,650	)		(41,469	)		(52,035	)

Total	￦	215,095		￦	(353,980	)	￦	(92,910	)

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

BC Card Co., Ltd., etc., subsidiaries of the Group, recognized interest income and expenses as operating revenue and expenses, respectively. Related interest income recognized as operating revenue is

￦

112,973 million (2021:

￦

27,440 million, 2022:

￦

68,869 million) and related interest expense recognized as operating expense is

￦

55,677 million (2021:

￦

5,458 million, 2022:

￦

27,060 million) for the year ended December 31, 2023.

2	The amounts directly reflected in equity after adjustments of deferred income tax.

3	During the years ended December 31, 2022 and 2023, certain derivatives of the Group were settled and the related gain or loss on valuation of cash flow hedge in other comprehensive income was reclassified to profit or loss for the year.

BC Card Co., Ltd., a subsidiary of the Group, recognized foreign currency transaction gain and loss and as operating revenue and expense. In relation to this, foreign currency transaction gain and loss recognized as operating revenue and expense amount to foreign exchange gain

￦

5,597 million (2021 foreign exchange gain and loss:

￦

2,373, 2022 foreign exchange gain and loss:

￦

3,569 million), respectively, for the year ended December 31, 2023.

5	BC Card Co., Ltd., a subsidiary of the Group, recognized dividend income as operating revenue. Related dividend income recognized as operating revenue is ￦ 1,759 million (2021: ￦ 1,340 million, 2022: ￦ 2,299 million) for the year ended December 31, 2023.

KT Investment Co., Ltd., etc., subsidiaries of the Group, recognized gain and loss on valuation of financial instruments measured at fair value through profit or loss as operating income and expenses. In relation to this, valuation gain and loss recognized as operating revenue and expense amount to valuation loss

￦

11,112 million (2021 valuation loss:

￦

15,459 million, 2022 valuation loss:

￦

7,860 million), for the year ended December 31, 2023.

7	BC Card Co., Ltd., a subsidiary of the Group, recognized gain and loss on valuation of derivatives as operating income and expenses. Related valuation gain recognized as operating revenue and expense is ￦ 48 million (2022 valuation loss: ￦ 418 million), for the year ended December 31, 2023.

8	KT Cloud Co., Ltd., a subsidiary of the Group, recognized gain on valuation as convertible preferred stock of ￦ 311,312 million for the year ended December 31, 2023.

5	Cash and Cash Equivalents

Restricted cash and cash equivalents as of December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022	December 31, 2023	Description
Bank deposits	￦ 29,874	￦ 49,555	Deposit restricted for government project and others

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

6	Trade and Other Receivables

(1) Trade and other receivables as of December 31, 2022 and 2023, are as follows:


	December 31, 2022
(in millions of Korean won)	Total amounts		Provision for impairment			Present value discount			Carrying amount
Current assets
Trade receivables	￦	3,439,542	￦	(342,539	)	￦	(6,926	)	￦	3,090,077
Other receivables		3,092,261		(82,243	)		(2,023	)		3,007,995

Total	￦	6,531,803	￦	(424,782	)	￦	(8,949	)	￦	6,098,072

Non-current assets
Trade receivables	￦	408,098	￦	(1,199	)	￦	(11,540	)	￦	395,359
Other receivables		1,249,096		(136,300	)		(17,109	)		1,095,687

Total	￦	1,657,194	￦	(137,499	)	￦	(28,649	)	￦	1,491,046


	December 31, 2023
(in millions of Korean won)	Total amounts		Provision for impairment			Present value discount			Carrying amount
Current assets
Trade receivables	￦	3,596,899	￦	(330,002	)	￦	(9,165	)	￦	3,257,732
Other receivables		3,990,900		(76,089	)		(2,254	)		3,912,557

Total	￦	7,587,799	￦	(406,091	)	￦	(11,419	)	￦	7,170,289

Non-current assets
Trade receivables	￦	318,429	￦	(1,288	)	￦	(19,476	)	￦	297,665
Other receivables		1,227,929		(107,547	)		(13,879	)		1,106,503

Total	￦	1,546,358	￦	(108,835	)	￦	(33,355	)	￦	1,404,168

(2) The fair values of trade and other receivables with original maturities less than one year are equal to their carrying amounts because the discounting effect is immaterial. The fair value of trade and other receivables with original maturities longer than one year, which are mainly from sales of goods, is determined by discounting the expected future cash flow at the weighted average interest rate.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(3) Details of changes in provision for impairment for the years ended December 31, 2022 and 2023, are as follows:


	2022						2023
(in millions of Korean won)	Trade receivables			Other receivables			Trade receivables			Other receivables
Beginning balance	￦	349,725		￦	201,387		￦	343,738		￦	218,543
Provision		64,522			65,941			69,972			114,501
Reversal		—			(850	)		—			(14,941	)
Write-off/transfer		(69,430	)		(49,904	)		(69,246	)		(129,108	)
Acquisition and disposition of businesses		(43	)		—			(310	)		(17	)
Others		(1,036	)		1,969			(12,864	)		(5,342	)

Ending balance	￦	343,738		￦	218,543		￦	331,290		￦	183,636

Provisions for impairment on trade and other receivables are recognized as operating expenses and finance costs.

(4) Details of other receivables as of December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Loans	￦	98,953		￦	51,854
Receivables 1		2,668,545			3,539,742
Accrued income		32,218			43,920
Refundable deposits		339,450			299,935
Loans receivable		1,013,428			1,067,005
Finance lease receivables		105,690			141,883
Others		63,941			58,357
Less: Provision for impairment		(218,543	)		(183,636	)

	￦	4,103,682		￦	5,019,060

1	As of December 31, 2023, credit sales asset of ￦ 2,696,505 million (December 31, 2022: ￦ 1,960,579 million) held by BC Card Co., Ltd. are included.

(5) The maximum exposure of trade and other receivables to credit risk is the carrying amount of each class of receivables mentioned above as of December 31, 2023.

(6) For trade receivables that meet certain criteria, the Group sells those on a periodic basis to an Special Purpose Company(SPC) and records them at financial assets as fair value through other comprehensive income considering the trade receivables business model for managing the asset and the cash flow characteristics of the contract.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

7	Other Financial Assets and Liabilities

(1) Details of other financial assets and liabilities as of December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Other financial assets
Financial assets at amortized cost 1	￦	1,060,058		￦	1,385,921
Financial assets at fair value through profit or loss 1,2		1,064,856			939,661
Financial assets at fair value through other comprehensive income		1,508,192			1,680,168
Derivatives used for hedging		190,830			159,211
Less: Non-current		(2,501,484	)		(2,724,761	)

Current	￦	1,322,452		￦	1,440,200

Other financial liabilities
Financial liabilities at amortized cost 3	￦	246,606		￦	915,185
Financial liabilities at fair value through profit or loss		141,280			136,106
Derivatives used for hedging		33,555			24,547
Less: Non-current		(412,650	)		(753,739	)

Current	￦	8,791		￦	322,099

1	As of December 31, 2023, the Group’s other financial assets amounting to ￦ 98,309 million (December 31, 2022: ￦ 102,215 million), which consist of checking account deposits, time deposits and others, are subject to withdrawal restrictions.

2	As of December 31, 2023, the Group provided investments in Korea Software Financial Cooperative amounting to ￦ 9,016 million as a collateral for the payment guarantee provided by the Cooperative.

3	The amount includes liabilities related to the obligation to acquire additional shares in Epsilon Global Communications Pte. Ltd. and MILLIE Co., Ltd and KT Cloud Co., Ltd. (Note 19).

(2) Financial Assets at fair value through profit or loss

Details of financial assets at fair value through profit or loss as of December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Equity Instruments (Listed)	￦	26,647		￦	13,911
Equity Instruments (Unlisted)		72,517			42,185
Debt securities		942,274			880,549
Derivatives held for trading 1		23,418			3,016

Total		1,064,856			939,661
Less: non-current		(609,887	)		(782,143	)

Current	￦	454,969		￦	157,518

1	According to a derivative arrangement with LS Marine Solution Co., Ltd. (formerly KT Submarine Co., Ltd.), derivative assets amounting to ￦ 1,015 million is included as of December 31, 2023. (Note 19).

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

2) The maximum exposure of debt instruments of financial assets recognized at fair value through profit or loss to credit risk is the carrying amount as of December 31, 2023.

(3) Financial Assets at fair value through other comprehensive income

1) Details of financial assets at fair value through other comprehensive income as of December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Equity Instruments (Listed)	￦	1,006,476		￦	1,231,188
Equity Instruments (Unlisted)		496,284			443,067
Debt securities		5,432			5,913

Total		1,508,192			1,680,168
Less: non-current		(1,508,192	)		(1,680,168	)

Current	￦	—		￦	—

2) Upon disposal of these equity investments, any balance within the accumulated other comprehensive income for these equity investments is not classified to profit or loss, but to retained earnings. Upon disposal of these debt investments, the remaining balance of the accumulated other comprehensive income of debt investments is reclassified to profit or loss.

(4) Derivatives used for hedging

1) Details of valu

tion of derivatives used for hedging as of December 31, 2022 and 2023, are as follows:


	December 31, 2022						December 31, 2023
(in millions of Korean won)	Assets			Liabilities			Assets			Liabilities
Interest rate swap	￦	4,236		￦	—		￦	1,530		￦	191
Currency swap 1		186,594			33,555			157,681			24,356

Total		190,830			33,555			159,211			24,547
Less: non-current		(147,141	)		(33,555	)		(107,802	)		(23,696	)

Current	￦	43,689		￦	—		￦	51,409		￦	851

1	The currency swap contract is to hedge the risk of variability in cash flow from the borrowings due to changes in interest rate and foreign exchange rate and the expected maximum period for the Group to be exposed to risks of cash flow fluctuation by hedged items is until September 7, 2034.

The entire fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and, as a current asset or liability, if the maturity of the hedged item is less than 12 months.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

2) The valuation gains and losses on the derivatives contracts for the years ended December 31, 2021, 2022 and 2023, are as follows:


(in millions of Korean won)	2021						2022						2023
Type of Transaction	Valuation gain		Valuation loss		Other comprehensive income 1		Valuation gain		Valuation loss		Other comprehensive income 1		Valuation gain		Valuation Loss		Other comprehensive income 1
Interest rate swap	￦	—	￦	—	￦	1	￦	63	￦	490	￦	4,666	￦	48	￦	—	￦	(2,945	)
Currency swap		203,961		7,206		191,569		154,611		20,723		79,781		45,709		162		(27,273	)
Currency forwards		—		—		—		—		—		754		—		—		—

Total	￦	203,961	￦	7,206	￦	191,570	￦	154,674	￦	21,213	￦	85,201	￦	45,757	￦	162	￦	(30,218	)

1	The amounts directly reflected in equity are before adjustments of deferred income tax and allocation to the non-controlling interest.

3) The ineffective portion recognized in profit or loss on the cash flow hedges are valuation loss of

￦

41 million for the year ended December 31, 2023 (2021: valuation gain of

￦

11,825 million, 2022: valuation gain of

￦

2,707 million).

4) The unsettled amount of derivative instruments for the years ended December 31, 2022 and 2023, are as follows:

(i) Hedging instruments


(in millions of Korean won and thousands of foreign currencies)	2022
					Book value of hedging instruments				Changes in fair value to calculate the ineffective portion of hedges
Currency	Foreign currency		Contract amount		Assets		Liabilities
USD		2,111,509	￦	2,527,626	￦	160,243	￦	32,936	￦	170,856
JPY		400,000		4,357		—		409		(308	)
SGD		284,000		245,208		26,351		—		20,511
EUR		7,700		10,283		—		210		129
KRW		—		170,000		4,236		—		4,717

Total			￦	2,957,474	￦	190,830	￦	33,555	￦	195,905


(in millions of Korean won and thousands of foreign currencies)	2023
					Book value of hedging instruments				Changes in fair value to calculate the ineffective portion of hedges
Currency	Foreign currency		Contract amount		Assets		Liabilities
USD		2,011,509	￦	2,417,473	￦	157,681	￦	23,465	￦	44,413
JPY		400,000		4,357		—		660		(162	)
EUR		7,700		10,283		—		231		381
KRW		—		240,000		1,530		191		707

Total		—	￦	2,672,113	￦	159,211	￦	24,547	￦	45,339

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KT Corporation and Subsidiaries

Notes to the Cons

lid

ted Financial Statements

December 31, 2021, 2022 and 2023

(ii) Hedged item


(in millions of Korean won)
(in millions of Korean won)	2022								2023
Currency	Book value of hedged items		Changes in fair value to calculate the ineffective portion of hedges			Cash flow hedge reserves 1			Book value of hedged items		Changes in fair value to calculate the ineffective portion of hedges			Cash flow hedge reserves 1
USD	￦	2,675,885	￦	(170,010	)	￦	(13,947	)	￦	2,593,707	￦	(44,365	)	￦	(30,415	)
JPY		3,813		308			116			3,651		162			49
SGD		267,843		(18,720	)		3,406			—		—			—
EUR		10,404		(121	)		582			10,985		(581	)		158
KRW		101,035		(4,655	)		4,385			239,944		(596	)		1,315

Total	￦	3,058,980	￦	(193,198	)	￦	(5,458	)	￦	2,848,287	￦	(45,380	)	￦	(28,893	)

1	The amount is after the deferred tax directly added or subtracted to the capital is reflected.

(5) Financial Liabilities at fair value through profit or loss

1) Details of financial liabilities at fair value through profit or loss as of December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022		December 31, 2023
Derivatives held for trading 1,2	￦	141,280	￦	136,106

In relation to the additional acquisition of shares of the equity method investee K Bank Inc in 2021, the Group has entered into a shareholder agreement with the shareholders of K Bank Inc. According to the shareholder agreement, if K Bank Inc fails to be listed on the terms agreed in the shareholder agreement, the shareholders of K Bank Inc may exercise their Drag-Along right to the Group and require the Group to sell all the shares owned by such shareholders in K Bank to third parties based on the guaranteed return agreed in the shareholder agreement. The shareholder agreement also includes a call option where, if the shareholders exercise their Drag-Along rights, the Group has an option to purchase the shares held by those shareholders. As of December 31, 2023, the derivative financial liability in accordance with IFRS 9 associated with the rights prescribed in the shareholders agreement was

￦

133,293 million(

￦

134,881 million as of December 31 2022).

2	The amount includes derivatives separated from convertible bonds issued by the Group (Note 15).

2) The valuation gain and loss on financial liabilities at fair value through profit or loss for the years ended December 31, 2021, 2022 and 2023, are as follows:

2021

2022

2023

(in millions of Korean won)

Valuation

gain

Valuation

loss

Valuation

gain

Valuation

loss

Valuation

gain

Valuation

loss

Derivatives liabilities held for trading

￦

51,187

￦

8,741

￦

24,683

￦

1,800

￦

3,316

￦

10,710

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

8.	Inventories

Inventories as at December 31, 2022 and 2023, are as follows:


	December 31, 2022							December 31, 2023
(in millions of Korean won)	Acquisition cost		Valuation allowance			Book amount		Acquisition cost		Valuation Allowance			Book amount
Merchandise	￦	768,748	￦	(96,010	)	￦	672,738	￦	981,127	￦	(102,215	)	￦	878,912
Others		44,935		—			44,935		109,439		—			109,439

Total	￦	813,683	￦	(96,010	)	￦	717,673	￦	1,090,566	￦	(102,215	)	￦	988,351

Cost of inventories recognized as expenses for the year ended December 31, 2023 amounts to

￦

3,386,069 million (2021:

￦

3,787,203 million, 2022:

￦

3,485,288 million) and valuation loss on inventory amounts to

￦

6,205

million for the year ended December 31, 2023 (2021: reversal valuation loss on inventory amounts to

￦

12,920

million, 2022: reversal valuation loss on inventory amounts to

￦

24,294 million).

9.	Other Assets and Liabilities

Other assets and liabilities as at December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Other assets
Advance payments	￦	181,150		￦	217,997
Prepaid expenses		107,775			146,628
Contract cost		1,817,678			1,727,468
Contract assets		802,253			832,520
Others		12,964			15,237
Less: Non-current		(820,608	)		(827,297	)

Current	￦	2,101,212		￦	2,112,553

Other liabilities
Advances received 1	￦	387,986		￦	682,880
Withholdings		155,017			159,080
Unearned revenue 1		46,493			27,392
Lease liabilities		1,172,038			1,179,909
Contract liabilities		284,107			278,749
Others		33,108			30,848
Less: Non-current		(945,731	)		(950,015	)

Current	￦	1,133,018		￦	1,408,843

1	The amounts include adjustments arising from adoption of IFRS 15 Revenue from Contracts with Customers (Note 25).

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

10	Property and Equipment

(1) Changes in property and equipment for the years ended December 31, 2022 and 2023, are as follows:


	2022
(in millions of Korean won)	Land			Buildings and structures			Machinery and equipment			Others			Construction- in-progress			Total
Acquisition cost	￦	1,315,929		￦	4,707,250		￦	40,270,005		￦	1,607,853		￦	1,094,479		￦	48,995,516
Less: Accumulated depreciation (including accumulated impairment loss and others)		(132	)		(2,189,828	)		(30,953,434	)		(1,386,615	)		(621	)		(34,530,630	)

Beginning, net		1,315,797			2,517,422			9,316,571			221,238			1,093,858			14,464,886
Acquisition and capital expenditure		11,392			32,030			129,754			67,921			3,105,283			3,346,380
Disposal and termination		(2,556	)		(4,338	)		(76,608	)		(4,695	)		(3,926	)		(92,123	)
Depreciation		—			(147,620	)		(2,413,191	)		(79,376	)		—			(2,640,187	)
Impairment		—			—			(6,084	)		(7,825	)		(2,247	)		(16,156	)
Transfer in (out) 1		24,647			230,955			2,660,753			31,036			(3,010,193	)		(62,802	)
Transfer from (to) investment properties		(63,278	)		(140,229	)		—			—			(2,676	)		(206,183	)
Acquisition and disposition of businesses		—			—			(4,386	)		(481	)		(3,720	)		(8,587	)
Others		(13,194	)		66,341			7,020			(4,382	)		(68,834	)		(13,049	)

Ending, net	￦	1,272,808		￦	2,554,561		￦	9,613,829		￦	223,436		￦	1,107,545		￦	14,772,179

Acquisition cost	￦	1,272,940		￦	4,830,853		￦	42,091,573		￦	1,276,779		￦	1,108,043		￦	50,580,188
Less: Accumulated depreciation (including accumulated impairment loss and others)		(132	)		(2,276,292	)		(32,477,744	)		(1,053,343	)		(498	)		(35,808,009	)

1	The amounts include the transferred amount to Intangible Assets account.


	2023
(in millions of Korean won)	Land			Buildings and structures			Machinery and equipment			Others			Construction- in-progress			Total
Acquisition cost	￦	1,272,940		￦	4,830,853		￦	42,091,573		￦	1,276,779		￦	1,108,043		￦	50,580,188
Less: Accumulated depreciation (including accumulated impairment loss and others)		(132	)		(2,276,292	)		(32,477,744	)		(1,053,343	)		(498	)		(35,808,009	)

Beginning, net		1,272,808			2,554,561			9,613,829			223,436			1,107,545			14,772,179
Acquisition and capital expenditure		844			5,072			75,412			78,400			3,029,380			3,189,108
Disposal and termination		(3,651	)		(5,012	)		(70,418	)		(1,711	)		(327	)		(81,119	)
Depreciation		—			(148,981	)		(2,495,402	)		(75,900	)		—			(2,720,283	)
Impairment		—			—			(6,577	)		(1	)		(1,294	)		(7,872	)
Transfer in (out) 1		58,790			151,157			2,706,444			16,407			(3,092,670	)		(159,872	)
Transfer from (to) investment properties		(37,725	)		(88,336	)		—			—			(189	)		(126,250	)
Acquisition and disposition of businesses		18,761			49,532			(14,981	)		(44,543	)		(3,205	)		5,564
Others		14,549			137			(1,628	)		(7,742	)		(4,692	)		624

Ending, net	￦	1,324,376		￦	2,518,130		￦	9,806,679		￦	188,346		￦	1,034,548		￦	14,872,079

Acquisition cost	￦	1,324,508		￦	4,903,073		￦	43,611,280		￦	1,182,144		￦	1,035,198		￦	52,056,203
Less: Accumulated depreciation (including accumulated impairment loss and others)		(132	)		(2,384,943	)		(33,804,601	)		(993,798	)		(650	)		(37,184,124	)

1	The amounts include the transferred amount to Intangible Assets account.

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2) Details of property and equipment and investment properties provided as collateral as of December 31, 2022 and 2023, are as follows:

(in millions of Korean won)

December 31, 2022

Carrying
amount

Secured
amount

Related line
item

Related
amount

Secured

party

Land and Buildings

￦

13,899

￦

19,100

Borrowings

￦

6,000

Industrial
Bank of
Korea,
etc.

Land and Buildings

￦

460,166

￦

61,733

Deposits

￦

52,662

Lessee

(in millions of Korean won)

December 31, 2023

Carrying
amount

Secured
amount

Related line
item

Related
amount

Secured

party

Land and Buildings

￦

81,057

￦

64,680

Borrowings

￦

54,900

Industrial
Bank of
Korea,
etc.

Land and Buildings

￦

555,921

￦

64,877

Deposits

￦

55,965

Lessee

(3) The borrowing costs capitalized for qualifying assets amount to

￦

17,671 million (2021:

￦

5,360 million, 2022:

￦

9,954 million),

for the year ended December 31, 2023. The range of interest rate applied to calculate the capitalized borrowing costs, for the year

ended December

31, 2023, is 1.86%~7.28% (2021: 1.85% ~ 2.45%, 2022: 1.85%~7.42%).

11.	Investment Properties

(1) Changes in investment properties for the years ended December 31, 2022 and 2023, are as follows:


	2022
(in millions of Korean won)	Land			Buildings			Construction- in-progress			Total
Acquisition cost	￦	815,331		￦	1,424,066		￦	66,801		￦	2,306,198
Less: Accumulated depreciation		(1,568	)		(583,976	)		—			(585,544	)

Beginning, net		813,763			840,090			66,801			1,720,654
Acquisition		14,569			17,351			55,478			87,398
Disposal and termination		(14,725	)		(5,858	)		(17	)		(20,600	)
Depreciation		—			(47,004	)		—			(47,004	)
Transfer from(to) property and equipment		63,278			140,229			2,676			206,183
Transfer and others		2,907			(28,350	)		12,170			(13,273	)

Ending, net	￦	879,792		￦	916,458		￦	137,108		￦	1,933,358

Acquisition cost	￦	881,360		￦	1,577,736		￦	137,108		￦	2,596,204
Less: Accumulated depreciation		(1,568	)		(661,278	)		—			(662,846	)

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


	2023

(in millions of Korean won)	Land			Buildings			Construction- in-progress			Total
Acquisition cost	￦	881,360		￦	1,577,736		￦	137,108		￦	2,596,204
Less: Accumulated depreciation		(1,568	)		(661,278	)		—			(662,846	)

Beginning, net		879,792			916,458			137,108			1,933,358
Acquisition		—			57,529			153,279			210,808
Disposal and termination		(8,167	)		(9,323	)		—			(17,490	)
Depreciation		—			(52,869	)		—			(52,869	)
Transfer from(to) property and equipment		37,725			88,336			189			126,250
Transfer and others		1			27,544			(29,467	)		(1,922	)

Ending, net	￦	909,351		￦	1,027,675		￦	261,109		￦	2,198,135

Acquisition cost	￦	910,919		￦	1,750,677		￦	261,109		￦	2,922,705
Less: Accumulated depreciation		(1,568	)		(723,002	)		—			(724,570	)

(2) The fair value of investment properties is

￦

5,276,169 million as of December 31, 2023 (December 31, 2022:

￦

5,370,047 million). The fair value of investment properties is estimated based on the expected cash flow.

(3) Rental income from investment properties is

￦

224,016 million in 2023 (2021:

￦

185,877 million, 2022:

￦

206,127 million)

. Th

direct operating expenses (including repairs and maintenance) arising from investment properties that generated rental income during the period are recognized as operating expenses.

(4) As of December 31, 2023, the Group (Lessor) has entered into a non-cancellable operating lease contract relating to real estate lease. The future minimum lease fee under this contract is

￦

101,738 million for one year or less,

￦

130,707 million more than one year and less than five years,

￦

18,817 million over five years, and

￦

251,262 million in total.

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

12.	Intangible Assets

(1) Changes in intangible assets for the years ended December 31, 2022 and 2023, are as follows:


	2022
(in millions of Korean won)	Goodwill			Development costs			Software			Frequency usage rights			Others			Total
Acquisition cost	￦	1,002,530		￦	1,812,377		￦	1,083,426		￦	2,617,647		￦	1,426,576		￦	7,942,556
Less: Accumulated amortization (including accumulated impairment loss and others)		(305,658	)		(1,584,004	)		(944,001	)		(778,516	)		(883,044	)		(4,495,223	)

Beginning, net	￦	696,872		￦	228,373		￦	139,425		￦	1,839,131		￦	543,532		￦	3,447,333
Acquisition and capital expenditure		19,455			45,997			55,651			—			225,886			346,989
Disposal and termination		—			(5,503	)		(48	)		—			(20,117	)		(25,668	)
Amortization		—			(93,374	)		(54,748	)		(350,265	)		(128,874	)		(627,261	)
Impairment		(24,006	)		(744	)		(508	)		—			(5,416	)		(30,674	)
Acquisition and disposition of businesses		—			(2,320	)		(802	)		—			(7,144	)		(10,266	)
Others		15,902			(573	)		16,106			(610	)		(1,445	)		29,380

Ending, net	￦	708,223		￦	171,856		￦	155,076		￦	1,488,256		￦	606,422		￦	3,129,833

Acquisition cost		1,037,887			1,803,687			1,156,951			2,617,707			1,532,061			8,148,293
Less: Accumulated amortization (including accumulated impairment loss and others)		(329,664	)		(1,631,831	)		(1,001,875	)		(1,129,451	)		(925,639	)		(5,018,460	)


	2023
(in millions of Korean won)	Goodwill			Development costs			Software			Frequency usage rights			Others			Total
Acquisition cost	￦	1,037,887		￦	1,803,687		￦	1,156,951		￦	2,617,707		￦	1,532,061		￦	8,148,293
Less: Accumulated amortization (including accumulated impairment loss and others)		(329,664	)		(1,631,831	)		(1,001,875	)		(1,129,451	)		(925,639	)		(5,018,460	)

Beginning, net		708,223			171,856			155,076			1,488,256			606,422			3,129,833
Acquisition and capital expenditure 1		—			33,078			38,603			37			238,019			309,737
Disposal and termination		—			(4,812	)		(397	)		—			(6,431	)		(11,640	)
Amortization 2		—			(63,052	)		(52,265	)		(350,276	)		(226,316	)		(691,909	)
Impairment		(230,352	)		(128	)		(16	)		—			(5,711	)		(236,207	)
Acquisition and disposition of businesses		6,207			—			(108	)		—			(69	)		6,030
Others		4,349			1,658			11,769			175			10,066			28,017

Ending, net	￦	488,427		￦	138,600		￦	152,662		￦	1,138,192		￦	615,980		￦	2,533,861

Acquisition cost	￦	1,036,354		￦	1,790,446		￦	1,196,329		￦	2,415,243		￦	1,725,087		￦	8,163,459
Less: Accumulated amortization (including accumulated impairment loss and others)		(547,927	)		(1,651,846	)		(1,043,667	)		(1,277,051	)		(1,109,107	)		(5,629,598	)

1	The amounts include the transferred amount from Property and Equipment account.

2	Amounts include ￦ 52,179 million which is the changed effect of useful life from Media Contents asset.

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2) Goodwill, amounting to

￦

212,910

million, is not subject to amortization as of December 31, 2023 (December 31, 2022:

￦

210,114

million).

(3) Goodwill is allocated to the Group’s cash-generating unit which is identified by operating segments. As of December 31, 2023, goodwill allocated to each cash-generating unit is as follows:


(in millions of Korean won)
Cash generating Unit	Amount

Mobile services 1,9	￦	65,057
BC Card Co., Ltd. 2		41,234
HCN Co., Ltd. 3		130,242
GENIE Music Corporation 4		50,214
MILLIE Co., Ltd. 5		54,725
PlayD Co., Ltd. 6		40,068
KT Telecop Co., Ltd. 7		15,418
Epsilon Global Communications Pte. Ltd. 8		45,670
KT MOS Bukbu Co., Ltd and others		45,799

Total	￦	488,427

The recoverable amounts of mobile services business are calculated based on value-in use calculations. These calculations use discounted cash flow projections for the next five years based on financial budgets. A terminal growth rate of 0.0% was applied for the cash flows expected to be incurred after five years. This growth rate does not exceed the average growth rate of the industry which the cash-generating unit belongs in. The Group estimated its revenue growth rate 0.56% based on past performance and its expectation of future market changes. In addition, management estimated the cash flow based on past performance and its expectation of market growth, and the discount rates 6.68% used reflected specific risks relating to the relevant CGU. As a result of the impairment test, the Group concluded that the carrying amount of CGU does not exceed the recoverable amount. Accordingly, the Group did not recognize an impairment loss on goodwill on mobile business for the years ended December 31, 2021, 2022 and 2023.

The recoverable amounts of BC Card Co., Ltd. are calculated based on value-in use calculations. These calculations use discounted cash flow projections for the next five years based on financial budgets. A terminal growth rate of 0.0% was applied for the cash flows expected to be incurred after five years. This growth rate does not exceed the average growth rate of the industry which the cash-generating unit belongs in. The Group estimated its revenue growth rate 0.04% based on past performance and its expectation of future market changes. In addition, management estimated the cash flow based on past performance and its expectation of market growth, and the discount rates 5.22% used reflected specific risks relating to the relevant CGU. As a result of the impairment test, the Group concluded that the carrying amount of CGU does not exceed the recoverable amount. Accordingly, the Group did not recognize an impairment loss on goodwill on BC Card Co., Ltd. for the years ended December 31, 2021, 2022 and 2023.

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

The recoverable amounts of HCN Co., Ltd. are calculated based on value-in use calculations. These calculations use discounted cash flow projections for the next five years based on financial budgets. A terminal growth rate of 0.0% was applied for the cash flows expected to be incurred after five years. This growth rate does not exceed the average growth rate of the industry which the cash-generating unit belongs in. The Group estimated its revenue growth rate 2.21% based on past performance and its expectation of future market changes. In addition, management estimated the cash flow based on past performance and its expectation of market growth, and the discount rates 11.37% used reflected specific risks relating to the relevant CGU. As a result of the impairment test, HCN’s recoverable amount was KRW 130,242 million, which was less than the carrying amount, and KRW 98,432 million of the impairment loss was

record

ed as goodwill in full and reflected in

operating

expenses.

The recoverable amounts of GENIE Music Corporation are calculated based on value-in use calculations. These calculations use discounted cash flow projections for the next five years based on financial budgets. A terminal growth rate of 0.0% was applied for the cash flows expected to be incurred after five years. This growth rate does not exceed the average growth rate of the industry which the cash-generating unit belongs in. The Group estimated its revenue growth rate 4.51% based on past performance and its expectation of future market changes. In addition, management estimated the cash flow based on past performance and its expectation of market growth, and the discount rates 16.73% used reflected specific risks relating to the relevant CGU. As a result of the impairment test, the Group concluded that the carrying amount of CGU does not exceed the recoverable amount. Accordingly, the Group did not recognize an impairment loss on goodwill on GENIE Music Corporation for the years ended December 31, 2023.

The recoverable amounts of MILLIE Co., Ltd. are calculated based on value-in use calculations. These calculations use discounted cash flow projections for the next four years based on financial budgets. A terminal growth rate of 1.0% was applied for the cash flows expected to be incurred after four years. This growth rate does not exceed the average growth rate of the industry which the cash-generating unit belongs in. The Group estimated its revenue growth rate 9.96% based on past performance and its expectation of future market changes. In addition, management estimated the cash flow based on past performance and its expectation of market growth, and the discount rates 22.48% used reflected specific risks relating to the relevant CGU. As a result of the impairment test, the Group concluded that the carrying amount of CGU does not exceed the recoverable amount. Accordingly, the Group did not recognize an impairment loss on goodwill on MILLIE Co., Ltd. for the years ended December 31, 2023.

The recoverable amount of PlayD Co., Ltd is calculated based on fair value less cost to sell.

The recoverable amounts of KT Telecop Co., Ltd. are calculated based on value-in use calculations. These calculations use discounted cash flow projections for the next five years based on financial budgets. A terminal growth rate of 1.0% was applied for the cash flows expected to be incurred after five years. This growth rate does not exceed the average growth rate of the industry which the cash-generating unit belongs in. The Group estimated its revenue growth rate 3.54% based on past performance and its expectation of future market changes. In addition, management estimated the cash flow based on past performance and its expectation of market growth, and the discount rates 9.04% used reflected specific risks relating to the relevant CGUs. As a result of the impairment test, the Group concluded that the carrying amount of CGU does not exceed the recoverable amount. Accordingly, the Group did not recognize an impairment loss on goodwill on KT Telecop Co., Ltd. for the years ended December 31, 2021, 2022 and 2023.

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

The recoverable amounts of Epsilon Global Communications Pte. Ltd. are calculated based on value-in use calculations. These calculations use discounted cash flow projections for the next nine years based on financial budgets. A terminal growth rate of 1.0% was applied for the cash flows expected to be incurred after nine years. This growth rate does not exceed the average growth rate of the industry which the cash-generating unit belongs in. The Group estimated its revenue growth rate 10.57% based on past performance and its expectation of future market changes. In addition, management estimated the cash flow based on past performance and its expectation of market growth, and the discount rates 8.84% used reflected specific risks relating to the relevant CGU. As a result of the impairment test, Epsilon Global Communications’s recoverable amount was KRW 45,670 million, which was less than the carrying amount, and KRW 118,609 million of the impairment loss was

record

ed as goodwill in full and reflected in

ope

rating

expenses.

The Group performed its impairment assessment for long-lived assets attributed to the Information and Communication Technology (“ICT”) reporting segment, which includes the Cash-Generating Units of Mobile, Fixed line, and Corporate Services (the “CGUs”). The Group compared the carrying value of each CGU to the estimated recoverable amount. The recoverable amounts of ICT reporting segment are calculated based on value-in use calculations. These calculations use discounted cash flow projections for the next five years based on financial budgets. A terminal growth rate of 0.0% was applied for the cash flows expected to be incurred after five years. This growth rate does not exceed the average growth rate of the industry which the cash-generating unit belongs in. The Group estimated its revenue growth rate 0.56% ~ 9.14% based on past performance and its expectation of future market changes. In addition, management estimated the cash flow based on past performance and its expectation of market growth, and the discount rate 6.68%. Accordingly, the Group did not recognize an impairment loss on ICT reporting segment for the years ended December 31, 2021, 2022 and 2023.

13.	Investments in Associates and Joint Ventures

(1) Details of associates as of December 31, 2022 and 2023, are as follows:


	Percentage of ownership (%)						Location		Closing month
	December 31, 2022			December 31, 2023
KIF Investment Fund		33.3	%		33.3	%		Korea		December
K Bank Inc.		33.7	%		33.7	%		Korea		December
HD Hyundai Robotics Co., Ltd. (formerly Hyundai Robotics Co., Ltd.) 1		10.0	%		10.0	%		Korea		December
Megazone Cloud Corporation 1		6.8	%		6.8	%		Korea		December
IGIS No. 468-1 General Private Real Estate Investment Company		44.6	%		44.6	%		Korea		December
KT-DSC Creative Economy Youth Start-up Investment Fund		28.6	%		28.6	%		Korea		December
IGIS Professional Investors Private Investment Real Estate Investment LLCNo 395		35.3	%		35.3	%		Korea		December
LS Marine Solution Co., Ltd (formerly KT Submarine Co., Ltd.). 1, 2		32.9	%		7.3	%		Korea		December

As of December 31, 2023, although the Group has less than

% ownership in ordinary share, this entity is included in investments in associates as the Group has significant influence in determining the operational and financial policies.

F-5

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

As of December 31, 2023, due to the loss of control of an entity, it is now accounted as an associate.

(2) Changes in investments in associates and joint ventures for the years ended December 31, 2022 and 2023, are as follows:


	2022
(in millions of Korean won)	Beginning		Acquisition (Disposal)		Share of net profit (loss) from associates and joint ventures			Others			Ending
KIF Investment Fund	￦	178,935	￦	—	￦	2,502		￦	(10,458	)	￦	170,979
K Bank Inc.		831,737		—		29,010			(7,991	)		852,756
HD Hyundai Robotics Co., Ltd. (formerly Hyundai Robotics Co., Ltd.)		48,725		—		798			(151	)		49,372
Megazone Cloud Corporation		—		130,001		(22,555	)		28,753			136,199
IGIS No. 468-1 General Private Real Estate Investment Company		—		25,000		(1,411	)		—			23,589
KT-DSC Creative Economy Youth Start-up Investment Fund		22,138		—		(13	)		(2	)		22,123
IGIS Professional Investors Private Investment Real Estate Investment LLC No. 395		17,084		—		(464	)		—			16,620
Others		189,810		100,040		(24,688	)		(56,078	)		209,084

	￦	1,288,429	￦	255,041	￦	(16,821	)	￦	(45,927	)	￦	1,480,722

F-

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


	2023
(in millions of Korean won)	Beginning		Acquisition (Disposal)			Share of net profit (loss) from associates and joint ventures 1			Others			Ending
KIF Investment Fund	￦	170,979	￦	—		￦	5,443		￦	632		￦	177,054
K Bank Inc.		852,756		—			1,089			19,036			872,881
HD Hyundai Robotics Co., Ltd. (formerly Hyundai Robotics Co., Ltd.)		49,372		—			(1,637	)		(1	)		47,734
Megazone Cloud Corporation		136,199		—			(4,583	)		78			131,694
IGIS No. 468-1 General Private Real Estate Investment Company		23,589		—			(105	)		—			23,484
KT-DSC Creative Economy Youth Start-up Investment Fund		22,123		(500	)		3,494			—			25,117
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		16,620		—			(4,678	)		—			11,942
LS Marine Solution Co., Ltd (formerly KT Submarine Co., Ltd.)		—		—			255			23,237	1		23,492
Others		209,084		101,887			(34,912	)		(32,568	)		243,491

	￦	1,480,722	￦	101,387		￦	(35,634	)	￦	10,414		￦	1,556,889

1	The amount represents the fair value of investment at the time the Company lost control (Refer to note above).

(3) Summarized financial information of associates and joint ventures as at and for the years ended December 31, 2022 and 2023, is as follows:


(in millions of Korean won)	December 31, 2022
	Current assets		Non-current assets		Current liabilities		Non-current liabilities
KIF Investment Fund	￦	98,132	￦	414,804	￦	—	￦	—
K Bank Inc.		16,562,742		71,265		14,830,983		2,168
HD Hyundai Robotics Co., Ltd. (formerly Hyundai Robotics Co., Ltd.).		278,413		135,380		63,009		64,335
Megazone Cloud Corporation		857,089		202,767		330,619		94,202
IGIS No. 468-1 General Private Real Estate Investment Company		52,851		—		12		—
KT-DSC Creative Economy Youth Start-up Investment Fund		908		76,884		362		—
IGIS Professional Investors Private Investment Real Estate Investment LLC No. 395		9,344		127,321		90,545		—

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


(in millions of Korean won)	December 31, 2023
	Current assets		Non-current assets		Current liabilities		Non-current liabilities

KIF Investment Fund	￦	128,344	￦	402,819	￦	—	￦	—
K Bank Inc.		21,320,790		89,812		19,541,076		4,516
HD Hyundai Robotics Co., Ltd. (formerly Hyundai Robotics Co., Ltd.)		251,868		134,424		106,557		9,775
Megazone Cloud Corporation		874,778		267,605		341,679		205,087
IGIS No. 468-1 General Private Real Estate Investment Company		2,985		49,631		11		—
KT-DSC Creative Economy Youth Start-up Investment Fund		482		87,528		101		—
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		5,690		145,769		107,553		—
LS Marine Solution Co., Ltd. (formerly KT Submarine Co., Ltd.)		66,767		80,307		23,906		207


(in millions of Korean won)	2022
	Operating revenue		Profit (loss) for the year			Other comprehensive income (loss)			Total comprehensive income (loss)			Dividends received from associates

KIF Investment Fund	￦	19,916	￦	7,505		￦	(11,779	)	￦	(4,274	)	￦	6,531
K Bank Inc.		558,872		86,498			(24,888	)		61,610			—
HD Hyundai Robotics Co., Ltd. (formerly Hyundai Robotics Co., Ltd.).		181,944		9,332			(49	)		9,283			—
Megazone Cloud Corporation		1,261,228		(293,186	)		(6,609	)		(299,795	)		—
IGIS No. 468-1 General Private Real Estate Investment Company		9		(3,161	)		—			(3,161	)		—
KT-DSC Creative Economy Youth Start-up Investment Fund		19,931		(53	)		—			(53	)		—
IGIS Professional Investors Private Investment Real Estate Investment LLC No. 395		—		(474	)		—			(474	)		—

F-6

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023



(in millions of Korean won)	2023
	Operating revenue		Profit (loss) for the year			Other comprehensive income (loss)			Total comprehensive income (loss)			Dividends received from associates

KIF Investment Fund	￦	33,017	￦	16,330		￦	—		￦	16,330		￦	1,139
K Bank Inc.		946,559		10,560			56,609			67,169			—
HD Hyundai Robotics Co., Ltd. (formerly Hyundai Robotics Co., Ltd.).		167,949		(17,513	)		(1,093	)		(18,606	)		—
Megazone Cloud Corporation		1,410,078		(34,760	)		(3,021	)		(37,781	)		—
IGIS No. 468-1 General Private Real Estate Investment Company		6		(234	)		—			(234	)		—
KT-DSC Creative Economy Youth Start-up Investment Fund		19,849		12,227			—			12,227			—
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		—		(406	)		—			(406	)		—
LS Marine Solution Co., Ltd (formerly KT Submarine Co., Ltd.)		70,779		11,618			(289	)		11,329			—

(4) Details of a reconciliation of the summarized financial information to the carrying amount of interests in the associates and joint ventures as at and for the years ended December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	2022
	Net assets (a)		Percentage of ownership (b)			Share in net assets (c)=(a)x(b)		Intercompany transaction and others (d)		Book amount (c)+(d)

KIF Investment Fund	￦	512,936		33.33	%	￦	170,979	￦	—	￦	170,979
K Bank Inc.		1,800,856		33.72	%		607,276		245,480		852,756
HD Hyundai Robotics Co., Ltd. (formerly Hyundai Robotics Co., Ltd.)		286,449		10.00	%		28,645		20,727		49,372
Megazone Cloud Corporation		635,035		6.83	%		43,360		92,839		136,199
IGIS No. 468-1 General Private Real Estate Investment Company		52,839		44.64	%		23,589		—		23,589
KT-DSC Creative Economy Youth Start-up Investment Fund		77,430		28.57	%		22,123		—		22,123
IGIS Professional Investors Private Investment Real Estate Investment LLC No. 395		46,120		35.29	%		16,278		342		16,620

F-6

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


(in millions of Korean won)	2023
	Net assets (a)		Percentage of ownership (b)			Share in net assets (c)=(a)x(b)		Intercompany transaction and others (d)			Book amount (c)+(d)

KIF Investment Fund	￦	531,164		33.33	%	￦	177,054	￦	—		￦	177,054
K Bank Inc.		1,865,010		33.72	%		628,910		243,971			872,881
HD Hyundai Robotics Co., Ltd. (formerly Hyundai Robotics Co., Ltd.)		269,960		10.00	%		26,996		20,738			47,734
Megazone Cloud Corporation		547,786		6.83	%		37,404		94,290			131,694
IGIS No. 468-1 General Private Real Estate Investment Company		52,605		44.64	%		23,484		—			23,484
KT-DSC Creative Economy Youth Start-up Investment Fund		87,908		28.57	%		25,117		—			25,117
IGIS Professional Investors Private Investment Real Estate Investment LLC No 395		43,905		35.29	%		15,496		(3,554	)		11,942
LS Marine Solution Co., Ltd (formerly KT Submarine Co., Ltd.)		122,961		7.30	%		8,972		14,520			23,492

(5) Due to discontinuance of equity method of accounting, the Group has not recognized loss from associates and joint ventures of

￦

833 million for the year ended December 31, 2023 (2021:

￦

717 million, 2022:

￦

909 million). The unrecognized accumulated comprehensive loss of associates and joint ventures as of December 31

2023

￦

10,748 million (2022:

￦

9,915 million).

14.	Trade and Other Payables

(1) Details of trade and other payables as of December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022		December 31, 2023
Current liabilities
Trade payables	￦	1,150,515	￦	1,297,752
Other payables		6,182,650		6,757,170

Total	￦	7,333,165	￦	8,054,922

Non-current liabilities
Trade payables	￦	—	￦	3,202
Other payables		1,064,099		816,356

Total	￦	1,064,099	￦	819,558

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2)

Details of other payables as of December 31, 2022 and 2023 are as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Non-trade payables 1	￦	4,981,300		￦	5,207,165
Accrued expenses		1,234,023			1,267,700
Operating deposits		818,603			880,810
Others		212,823			217,851
Less: non-current		(1,064,099	)		(816,356	)

Current	￦	6,182,650		￦	6,757,170

1	As of December 31, 2023, credit sale liabilities amounting to ￦ 2,314,077 million (December 31, 2022: ￦ 1,754,075 million) held by BC Card Co., Ltd. (a subsidiary of the Group) are included.

15.	Borrowings

(1)

Details of borrowings as of December 31, 2022 and 2023, are as follows:

Debentures


(in millions of Korean won and foreign currencies in thousands)				December 31, 2022				December 31, 2023
Type	Maturity		Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won
MTNP notes 1		Sep. 7, 2034	6.500%		USD 100,000	￦	126,730		USD 100,000	￦	128,940
MTNP notes		Jul. 18, 2026	2.500%		USD 400,000		506,920		USD 400,000		515,760
MTNP notes		Aug. 23, 2023	—		USD 100,000		126,730		—		—
MTNP notes		Jul. 19, 2024	0.330%		JPY 400,000		3,813		JPY 400,000		3,651
MTNP notes		Sep. 1. 2025	1.000%		USD 400,000		506,920		USD 400,000		515,760
FR notes 2		Nov. 1, 2024	Compounded SOFR+1.210%		USD 350,000		443,555		USD 350,000		451,290
FR notes		Jun. 19, 2023	—		SGD 284,000		267,843		—		—
MTNP notes		Jan. 21, 2027	1.375%		USD 300,000		380,190		USD 300,000		386,820
MTNP notes		Aug. 08, 2025	4.000%		USD 500,000		633,650		USD 500,000		644,700
The 183-3rd Public bond		Dec. 22, 2031	4.270%		—		160,000		—		160,000
The 184-2nd Public bond		Apr. 10, 2023	—		—		190,000		—		—
The 184-3rd Public bond		Apr. 10, 2033	3.170%		—		100,000		—		100,000
The 186-3rd Public bond		Jun. 26, 2024	3.418%		—		110,000		—		110,000
The 186-4th Public bond		Jun. 26, 2034	3.695%		—		100,000		—		100,000
The 187-3rd Public bond		Sep. 2, 2024	3.314%		—		170,000		—		170,000
The 187-4th Public bond		Sep. 2, 2034	3.546%		—		100,000		—		100,000
The 188-2nd Public bond		Jan. 29, 2025	2.454%		—		240,000		—		240,000
The 188-3rd Public bond		Jan. 29, 2035	2.706%		—		50,000		—		50,000
The 189-3rd Public bond		Jan. 28, 2026	2.203%		—		100,000		—		100,000
The 189-4th Public bond		Jan. 28, 2036	2.351%		—		70,000		—		70,000
The 190-2nd Public bond		Jan. 30, 2023	—		—		150,000		—		—
The 190-3rd Public bond		Jan. 30, 2028	2.947%		—		170,000		—		170,000
The 190-4th Public bond		Jan. 30, 2038	2.931%		—		70,000		—		70,000
The 191-2nd Public bond		Jan. 15, 2024	2.088%		—		80,000		—		80,000
The 191-3rd Public bond		Jan. 15, 2029	2.160%		—		110,000		—		110,000
The 191-4th Public bond		Jan. 14, 2039	2.213%		—		90,000		—		90,000
The 192-2nd Public bond		Oct. 11, 2024	1.578%		—		100,000		—		100,000
The 192-3rd Public bond		Oct. 11, 2029	1.622%		—		50,000		—		50,000
The 192-4th Public bond		Oct. 11, 2039	1.674%		—		110,000		—		110,000
The 193-1st Public bond		Jun. 16, 2023	—		—		150,000		—		—
The 193-2nd Public bond		Jun. 17, 2025	1.434%		—		70,000		—		70,000
The 193-3rd Public bond		Jun. 17, 2030	1.608%		—		20,000		—		20,000
The 193-4th Public bond		Jun. 15, 2040	1.713%		—		60,000		—		60,000

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


(in millions of Korean won and foreign currencies in thousands)				December 31, 2022				December 31, 2023
Type	Maturity		Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won
The 194-1st Public bond		Jan. 26, 2024	1.127%		—		130,000		—		130,000
The 194-2nd Public bond		Jan. 27, 2026	1.452%		—		140,000		—		140,000
The 194-3rd Public bond		Jan. 27, 2031	1.849%		—		50,000		—		50,000
The 194-4th Public bond		Jan. 25, 2041	1.976%		—		80,000		—		80,000
The 195-1st Public bond		Jun. 10, 2024	1.387%		—		180,000		—		180,000
The 195-2nd Public bond		Jun. 10, 2026	1.806%		—		80,000		—		80,000
The 195-3rd Public bond		Jun. 10, 2031	2.168%		—		40,000		—		40,000
The 196-1st Public bond		Jan. 27, 2025	2.596%		—		270,000		—		270,000
The 196-2nd Public bond		Jan. 27, 2027	2.637%		—		100,000		—		100,000
The 196-3rd Public bond		Jan. 27, 2032	2.741%		—		30,000		—		30,000
The 197-1st Public bond		Jun. 27, 2025	4.191%		—		280,000		—		280,000
The 197-2nd Public bond		Jun. 29, 2027	4.188%		—		120,000		—		120,000
The 198-1st Public bond		Jan. 10, 2025	3.847%		—		—		—		70,000
The 198-2nd Public bond		Jan. 12, 2026	3.869%		—		—		—		150,000
The 198-3rd Public bond		Jan. 12, 2028	3.971%		—		—		—		80,000
The 199-1st Public bond		Jul. 11, 2025	4.028%		—		—		—		85,000
The 199-2nd Public bond		Jul. 10, 2026	4.146%		—		—		—		160,000
The 199-3rd Public bond		Jul. 12, 2028	4.221%		—		—		—		155,000
The 18-1st unsecured bond		Jul. 2, 2024	1.844%		—		100,000		—		100,000
The 18-2nd unsecured bond		Jul. 2, 2026	2.224%		—		50,000		—		50,000
The 148th Won-denominated unsecured bond		Jun. 23, 2023	—		—		100,000		—		—
The 149-1st Won-denominated unsecured bond		Mar. 8, 2024	1.440%		—		70,000		—		70,000
The 149-2nd Won-denominated unsecured bond		Mar. 10, 2026	1.756%		—		30,000		—		30,000
The 150-1st Won-denominated unsecured bond		Apr. 7, 2023	—		—		20,000		—		—
The 150-2nd Won-denominated unsecured bond		Apr. 8, 2024	1.462%		—		30,000		—		30,000
The 151-1st Won-denominated unsecured bond		May 12, 2023	—		—		10,000		—		—
The 151-2nd Won-denominated unsecured bond		May 14, 2024	1.432%		—		40,000		—		40,000
The 152-1st Won-denominated unsecured bond		Aug. 30, 2024	1.813%		—		80,000		—		80,000
The 152-2nd Won-denominated unsecured bond		Aug. 28, 2026	1.982%		—		20,000		—		20,000
The 153-1st Won denominated unsecured bond		Nov. 10, 2023	—		—		30,000		—		—
The 153-2nd Won-denominated unsecured bond		Nov. 11, 2024	2.425%		—		70,000		—		70,000
The 154th Won-denominated unsecured bond		Jan. 23, 2025	2.511%		—		40,000		—		40,000
The 155-1st Won-denominated unsecured bond		Feb. 29, 2024	2.615%		—		50,000		—		50,000
The 155-2nd Won-denominated unsecured bond		Sep. 2, 2024	2.745%		—		20,000		—		20,000
The 155-3rd Won-denominated unsecured bond		Feb. 28, 2025	2.880%		—		20,000		—		20,000
The 156-1st Won-denominated unsecured bond 3		Mar. 25, 2025	5Y CMS+0.404%		—		60,000		—		60,000

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


(in millions of Korean won and foreign currencies in thousands)				December 31, 2022					December 31, 2023
Type	Maturity		Annual interest rates	Foreign currency		Korean won			Foreign currency		Korean won
The 156-2nd Won-denominated unsecured bond 3		Mar. 25, 2032	10Y CMS+0.965%		—		40,000			—		40,000
The 157-1st Won-denominated unsecured bond		Apr. 28, 2023	—		—		30,000			—		—
The 157-2nd Won-denominated unsecured bond		Oct. 27, 2023	—		—		30,000			—		—
The 158th Won-denominated unsecured bond		Jan. 27, 2025	4.421%		—		50,000			—		50,000
The 159-1st Won-denominated unsecured bond		Aug. 09, 2024	4.267%		—		30,000			—		30,000
The 159-2nd Won-denominated unsecured bond		Aug. 11, 2027	4.505%		—		30,000			—		30,000
The 160-1st Won-denominated unsecured bond		Jun. 14, 2024	5.615%		—		20,000			—		20,000
The 160-2nd Won-denominated unsecured bond		Dec. 13, 2024	5.667%		—		20,000			—		20,000
The 160-3rd Won-denominated unsecured bond		Dec. 12, 2025	5.769%		—		30,000			—		30,000
The 161-1st Won-denominated unsecured bond		Jun. 21, 2024	5.527%		—		10,000			—		10,000
The 161-2nd Won-denominated unsecured bond		Dec. 20, 2024	5.557%		—		20,000			—		20,000
The 161-3rd Won-denominated unsecured bond		Jun. 20, 2025	5.594%		—		30,000			—		30,000
The 161-4th Won-denominated unsecured bond		Dec. 22, 2025	5.615%		—		10,000			—		10,000
The 162-1st Won-denominated unsecured bond		Dec. 27, 2023	—		—		50,000			—		—
The 162-2nd Won-denominated unsecured bond		Jan. 26, 2024	5.069%		—		40,000			—		40,000
The 162-3rd Won-denominated unsecured bond		Apr. 26, 2024	5.080%		—		10,000			—		10,000
The 163-1st Won-denominated unsecured bond		Feb. 20, 2026	4.059%		—		—			—		20,000
The 163-2nd Won-denominated unsecured bond		Feb. 22, 2028	4.311%		—		—			—		80,000
The 164-1st Won-denominated unsecured bond		Apr. 12, 2024	3.778%		—		—			—		10,000
The 164-2nd Won-denominated unsecured bond		Oct. 24, 2024	3.821%		—		—			—		30,000
The 164-3rd Won-denominated unsecured bond		Apr. 14, 2028	4.220%		—		—			—		30,000
The 165-1st Won-denominated unsecured bond		May. 09, 2025	3.870%		—		—			—		30,000
The 165-2nd Won-denominated unsecured bond		Nov. 09, 2026	3.932%		—		—			—		10,000
The 165-3rd Won-denominated unsecured bond		May. 07, 2027	3.972%		—		—			—		30,000
The 166-1st Won-denominated unsecured bond		Nov. 22. 2024	4.205%		—		—			—		20,000
The 166-2nd Won-denominated unsecured bond		Apr. 22. 2025	4.310%		—		—			—		40,000
The 166-3rd Won-denominated unsecured bond		May. 21. 2025	4.332%		—		—			—		10,000
The 166-4th Won-denominated unsecured bond		May. 22. 2025	4.332%		—		—			—		40,000
The 167-1st Won-denominated unsecured bond		Dec. 20. 2024	3.865%		—		—			—		30,000
The 167-2nd Won-denominated unsecured bond		Jan. 22. 2025	3.864%		—		—			—		50,000
The 167-3rd Won-denominated unsecured bond		Feb. 21. 2025	3.864%		—		—			—		10,000
The 167-4th Won-denominated unsecured bond		Dec. 22. 2025	3.858%		—		—			—		10,000

Subtotal							8,406,351					8,446,921
Less: Current portion							(1,154,101	)				(1,924,523	)
Discount on bonds							(23,728	)				(19,248	)

Total						￦	7,228,522				￦	6,503,150

As of December 31, 2023, the Controlling Company has outstanding notes in the amount of USD 100 million with fixed interest rates under Medium Term Note Program (“MTNP”) registered in the Singapore Stock Exchange, which allowed issuance of notes of up to USD 2,000 million. However, the MTNP has been terminated since 2007.

2	The Daily SOFR is approximately 5.380% as of December 31, 2023. Due to the recent suspension of LIBOR calculation, the Group changed the alternative indicator interest rate to Compounded SOFR+ 1.210 %.

3	The CMS (5Y) and CMS (10Y) is approximately 2.993% and 2.990%, respectively as of December 31, 2023.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

)

Convertible bonds


(in millions of Korean won)
Type	Issuance Date		Maturity		Annual interest Rate		December 31, 2022			December 31, 2023
The 1st CB (Private) 1		Jun. 5, 2020		Jun. 5, 2025		2	￦	8,000		￦	8,000
The 1st unsecured CB 3		Jul. 25, 2022		Jan. 25, 2025		—		30,000			—
Redemption premium								4,565			2,267
Bond discount issuance								(7,206	)		(1,811	)

Subtotal								35,359			8,456
Current portion								—			(8,456	)

Total							￦	35,359		￦	—

1	Common shares of Storywiz are subject to conversion (appraisal period: June 5, 2021~May 4, 2025).

2	Nominal interest rate and maturity yield is approximately 0% and 5%, respectively, and will be settled on maturity.

3	During the current period, bonds of kt cloud are converted to 73,800 of Common shares and 73,800 of preference shares.

)

Borrowings

a.	Short-term borrowings


(in millions of Korean won)			December 31, 2022				December 31, 2023
Type	Financial institution	Annual interest rates	Foreign currency		Korean won		Foreign currency		Korean won

Operational	Shinhan Bank	3.840%~6.430%		—	￦	105,000		—	￦	151,500
		—		—		30,000		—		—
	Woori Bank 1,	—		—		50,000		—		—
		4.400%				—				70,000
		CD(91D)+1.960%		—		—		—		20,000
	Korea Development Bank	3.230%~4.950%		—		27,201		—		34,900
	Industrial Bank of Korea	4.862%		—		6,000		—		6,000
	Hana Bank 1	CD(91D)+0.126%		—		5,000		—		4,800
	KB SECURITIES	4.110%~4.910%		—		94,822		—		69,635
	NH INVESTMENT & SECURITIES	—		—		20,000		—		—
	HSBC 2	Compounded SOFR +2.100%		USD 18,500		23,451		USD 23,600		30,450
	NongHyup Bank	4.880%		—		9,000		—		8,500
		—		—		15,000		—		—
	IBK Securities	—		—		20,000		—		—
	Hi Investment & Securities	—		—		99,524		—		—
	Korea Investment	4.910%		—		—				30,000

				Total			￦	504,998	￦	425,785

1	CD (91D) is approximately 3.820% as of December 31, 2023.

2	The Daily SOFR is approximately 5.380% as of December 31, 2023.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

b. Long-term borrowings


(in millions of Korean won and thousands of foreign currencies)			December 31, 2022					December 31, 2023
Financial institution	Type	Annual interest rates	Foreign currency		Korean won			Foreign currency		Korean won
Export-Import Bank of Korea	Inter-Korean Cooperation Fund 1	1.00%		—	￦	1,974			—	￦	1,480
CA-CIB	General loans	3.380%~4.150%		—		200,000			—		200,000
JPM	General loans	2.700%~4.480%		—		100,000			—		200,000
DBS	General loans	4.079%		—		100,000			—		100,000
Shinhan Bank	General loans 2	Term SOFR(3M)+1.100%		USD 8,910		11,292			USD 8,910		11,489
	General loans	—		USD 38,000		48,158			—		—
	General loans	1.900%~3.200%		USD 31,472		39,855			USD 31,472		40,655
	General loans 3	4.490%		—		62,398			—		62,398
	General loans 2	Term SOFR(3M)+1.300%		USD 21,127		26,774			USD 21,127		27,241
	General loans 2	Term SOFR(3M)+1.940%		—		—			USD 35,000		45,129
	General loans 2	CD(91D)+1.800%		—		—			—		16,900
	General loans 2	EURIBOR(3M)+0.900%		EUR 7,700		10,404			EUR 7,700		10,985
Woori Bank	General loans	3.320%~5.800%		—		15,000			—		41,526
	PF loans	—		—		40,682			—		—
Hi Investment & Securities	CP	2.302%		—		90,724			—		92,994
Bookook Investment	CP	3.490%~3.603%		—		18,806			—		19,525
Korea Investment	CP	3.622%		—		73,039			—		75,928
Korea Development Bank	General loans	3.000%~4.870%		—		38,000			—		137,000
NH Jayang	PF loans 2	CD(91D)+1.150 %		—		59,066			—		53,033
Kyobo Life Insurance	PF loans 2	CD(91D)+1.150%~ CD(91D) +3.450%		—		66,390			—		84,586
Standard Chartered Bank Korea	PF loans 2	CD(91D)+1.150%~ CD(91D) +3.450%		—		44,260			—		56,390
General loans 2		CD(91D)+0.750%		—		—			—		32,000
Samsung Life Insurance	PF loans	1.860%~4.160%		—		36,883			—		46,992

Subtotal						1,083,705					1,356,251
Less: Current portion						(167,943	)				(699,800	)

					￦	915,762				￦	656,451

1	The above Inter-Korean Cooperation Fund is repayable in installments over 13 years after a seven-year grace period.

2	EURIBOR (3M), Term SOFR (3M) and CD (91D) are approximately 3.909%, 5.331%, 3.820% respectively, as of December 31, 2023.

3	The general loans are repayable in installments over 4 years after a three-year grace period.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2)

Repayment schedule of the Group’s debentures and borrowings including the portion of current liabilities as of December 31, 2023, is as follows:


(in millions of Korean won)
	Bonds						Borrowings						Total
	In local currency		In foreign currency		Sub- total		In local currency		In foreign currency		Sub- total
Jan. 1, 2024 ~ Dec. 31, 2024	￦	1,478,000	￦	454,941	￦	1,932,941	￦	1,016,254	￦	109,331	￦	1,125,585	￦	3,058,526
Jan. 1, 2025 ~ Dec. 31, 2025		1,445,000		1,160,460		2,605,460		421,322		56,618		477,940		3,083,400
Jan. 1, 2026 ~ Dec. 31, 2026		760,000		515,760		1,275,760		109,087		—		109,087		1,384,847
Jan. 1, 2027 ~ Dec. 31, 2027		280,000		386,820		666,820		15,600		—		15,600		682,420
After Jan. 1, 2028		1,845,000		128,940		1,973,940		53,825		—		53,825		2,027,765

Total	￦	5,808,000	￦	2,646,921	￦	8,454,921	￦	1,616,088	￦	165,949	￦	1,782,037	￦	10,236,958

16.	Provisions

Changes in provisions for the years ended December 31, 2022 and 2023, are as follows:


	2022
(in millions of Korean won)	Litigation			Restoration cost			Others			Total
Beginning balance	￦	80,165		￦	107,358		￦	69,874		￦	257,397
Increase (Transfer)		6,005			13,027			5,847			24,879
Usage		(6,155	)		(8,143	)		(15,783	)		(30,081	)
Reversal		(43,686	)		(3,685	)		(4,418	)		(51,789	)
Others		—			405			(445	)		(40	)

Ending balance	￦	36,329		￦	108,962		￦	55,075		￦	200,366

Current		34,730			19,918			54,485			109,133
Non-current	￦	1,599		￦	89,044		￦	590		￦	91,233

	2023
(in millions of Korean won)	Litigation			Restoration cost			Others			Total
Beginning balance	￦	36,329		￦	108,962		￦	55,075		￦	200,366
Increase (Transfer)		592			26,381			10,656			37,629
Usage		(7,179	)		(1,138	)		(6,391	)		(14,708	)
Reversal		(35	)		(653	)		(2,096	)		(2,784	)
Scope change		—			—			(177	)		(177	)
Others		—			(393	)		2,290			1,897

Ending balance	￦	29,707		￦	133,159		￦	59,357		￦	222,223

Current	￦	29,130		￦	26,945		￦	59,134		￦	115,209
Non-current		577			106,214			223			107,014

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

17.	Net Defined Benefit Liabilities (Assets)

(1)

The amounts recognized in the statements of financial position as of December 31, 2022 and 2023, are determined as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Present value of defined benefit obligations	￦	2,218,655		￦	2,365,793
Fair value of plan assets		(2,478,143	)		(2,462,925	)

Liabilities	￦	51,654		￦	63,616

Assets	￦	311,142		￦	160,748

(2)

Changes in the defined benefit obligations for the years ended December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	2022			2023
Beginning	￦	2,494,930		￦	2,218,655
Current service cost		238,068			213,489
Interest expense		59,041			103,874
Benefit paid		(316,047	)		(358,298	)
Changes due to settlements of plan & Past Service Cost		(701	)		1
Remeasurements:
Actuarial gains ( losses ) arising from changes in demographic assumptions		(13,048	)		1,903
Actuarial gains ( losses ) arising from changes in financial assumptions		(323,501	)		138,462
Actuarial gains arising from experience adjustments		80,845			48,174
Acquisition and disposition of businesses, etc.		(932	)		(467	)

Ending	￦	2,218,655		￦	2,365,793

(3)

Changes in the fair value of plan assets for the years ended December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	2022			2023
Beginning	￦	2,314,632		￦	2,478,143
Interest income		55,902			121,336
Remeasurements:
Return on plan assets (excluding amounts included in interest income)		(8,542	)		9,410
Benefits paid		(287,419	)		(307,762	)
Employer contributions		401,358			165,128
Acquisition and disposition of businesses, etc.		2,212			(3,330	)

Ending	￦	2,478,143		￦	2,462,925

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(4)

Amounts recognized in the consolidated statements of profit or loss for the years ended December 31, 2021, 2022 and 2023, are as follows:


(in millions of Korean won)	2021			2022			2023
Current service cost	￦	249,125		￦	238,068		￦	213,922
Net Interest cost		5,047			3,139			(17,462	)
Changes due to settlements of plan & Past Service Cost		(681	)		(701	)		1
Transfer out		(16,660	)		(15,102	)		(13,435	)

Total expenses	￦	236,831		￦	225,404		￦	183,026

(5)

Principal actuarial assumptions used are as follows:

December 31,
2021

December 31,
2022

December 31,
2023

Discount rate

2.1%~3.70%

2.4%~6.29%

3.67%~5.51%

Salary growth rate

1%~6.97%

1.82%~8.9%

1.7%~8.96%

(6)

The sensitivity of the defined benefit obligations as of December 31, 2023, to changes in the principal assumptions is:


(In percentage, in millions of Korean won )	Effect on defined benefit obligation
	Changes in assumption	Increase in assumption		Decrease in assumption
Discount rate	0.5% point		￦ (139,461)	￦	150,568
Salary growth rate	0.5% point		145,687		(135,431	)

A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.

The above sensitivity analysis is based on an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. The sensitivity of the defined benefit obligation to changes in principal actuarial assumptions is calculated using the projected unit credit method, the same method applied when calculating the defined benefit obligations recognized on the statement of financial position.

(7)

Effect of defined benefit plan on future cash flows

The Group actively monitors how the duration and the expected yield of the investments match the expected cash outflows arising from the pension obligations. Expected contributions to post-employment benefit plans for the year ending December 31, 2023, are

￦

273,503 million.

The expected maturity analysis of undiscounted pension benefits as

f December 31, 2023, is as follows:

(in millions of Korean won)

Less than

1 year

Between 1-
2 years

Between 2-
5 years

Over 5 years

Total

Pension benefits

￦

257,315

￦

376,352

￦

910,076

￦

2,013,167

￦

3,556,910

The weighted average duration of the defined benefit obligations is 6.2 years.

18.	Defined Contribution Plan

Recognized expense related to the defined contribution plan for the year ended December 31, 2023, is

￦

85,174 million (2021:

￦

71,068 million, 2022:

￦

72,576 million).

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

19.	Commitments and Contingencies

(1)

As of December 31, 2023, major commitments with local financial institutions are as follows:


(in millions of Korean won and foreign currencies in thousands)	Financial institution	Limit		Used amount
Bank overdraft	Kookmin Bank and others		374,000		—
Inter-Korean Cooperation Fund	Export-Import Bank of Korea		37,700		1,480
Economic Cooperation Business Insurance	Export-Import Bank of Korea		3,240		1,732
Collateralized loan on electronic accounts receivable-trade	Kookmin Bank and others		545,350		42,822
Plus electronic notes payable	Industrial Bank of Korea		50,000		885
Working capital loan	Korea Development Bank and others		1,562,800		142,700
	Shinhan Bank		USD 76,509		USD 76,509
	Woori Bank		EUR 7,700		EUR 7,700
Facility loans	Shinhan Bank and others		924,000		429,924
Derivatives transaction limit	Korea Development Bank and others		USD 1,970,000		USD 1,970,000
Citi Bank			JPY 400,000		JPY 400,000
Total	KRW		3,497,090		619,543
	USD		2,046,509		2,046,509
	EUR		7,700		7,700
	JPY		400,000		400,000

(2)

As of December 31, 2023, guarantees received from financial institutions are as follows:


(in millions of Korean won and foreign currencies in thousands)	Financial institution	Limit
Hana Bank	Guarantee for payment in Korean currency		4,000
	Comprehensive credit line and others		3,100
	Guarantee for payment in foreign currency		USD 59
	Comprehensive credit line and others		USD 10,300
Kookmin Bank	Guarantee for payment in foreign currency		USD 3,186
Shinhan Bank	Guarantee for payment in Korean currency and others		USD 94,517
	Guarantee for payment in foreign currency and others		VND 211,262
Woori Bank	Guarantee for payment in Korean currency		5,200
	Guarantee for payment in foreign currency		USD 7,000
Korea Development Bank	Refund guarantee for advances received		USD 6,811
HSBC	Guarantees for depositions		USD 816
Seoul Guarantee Insurance Company	Performance guarantee and others		366,395
Korea Software Financial Cooperative	Performance guarantee and others		1,556,979
Korea Specialty Contractor Financial Cooperative	Performance guarantee and others		135
Korea Housing Finance Corporation	Performance guarantee and others		44,000

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


(in millions of Korean won and foreign currencies in thousands)	Financial institution	Limit
Korea Housing & Urban Guarantee Corporation 1	Performance guarantee and others		691,530
Information & Communication Financial Cooperative	Performance guarantee and others		78,183

Total	KRW		2,749,522
	USD		122,689
	VND		211,262

Inventory assets(

￦

278,031

million) and investment properties(

￦

283,688

million) are provided as collateral with commitment respectively, as of December 31, 2023.

(3)

As of December 31, 2023, guarantees provided by the Group to a third party, are as follows:

(in millions of Korean won)

Subject to payment
guarantees

Creditor

Limit

Used
amount

Period

KT Estate Inc

Wonju Bando U-bora Mark Bridge Buyer

Hana Bank

103,000

55,314

Aug. 5, 2022
~ Feb. 28, 2025

KT Engineering Co., Ltd.

Gasan Solar Power Plant Inc.

Shinhan Bank

4,700

364

Jan. 7, 2010
~ Jan. 8, 2025

KT Engineering Co., Ltd.

Korea Cell Inc.

Suhyup Bank

3,250

Feb. 17, 2014
~ Feb. 16, 2024

KT Engineering Co., Ltd.

San-Ya Agricultural

Association Corporation

Suhyup Bank

3,250

Feb. 17, 2014
~ Feb. 16, 2024

KT Alpha Co., Ltd.

Cash payers

T-commerce

cash payers

821

—

Apr. 14, 2023
~ Apr. 12, 2024

Nasmedia Co., Ltd.

Stockholders Association Members

Korea
Securities
Finance Corp

1,104

610

—

KT Engineering Co., Ltd., a subsidiary of the Group, is subject to payment, depending on the reimbursement of principal debtor.

(4)

The Controlling Company is jointly and severally obligated with KT Sat Co., Ltd., a subsidiary, to pay KT Sat Co., Ltd.’s liabilities incurred prior to spin-off. As of December 31, 2023, the Controlling Company and KT Sat Co., Ltd. are jointly and severally liable for reimbursement of

￦

595 million.

(5)

For the year ended December 31, 2023, the Group entered into agreements with the Securitization Specialty Companies (2023: First 5G 67

to 72

Securitization Specialty Co., Ltd., 2022: First 5G 61

to 66

Securitization Specialty Co., Ltd.) and disposed of its trade receivables related to handset sales. The Group also made asset management agreements with each securitization specialty company and in accordance with the agreement, the Group will receive asset management fees upon liquidation of the securitization specialty company.

(6)

As of December 31, 2023, the Group is a defendant in 177 lawsuits with the total claimed amount of

￦

167,834 million (2022:

￦

80,279 million). As of December 31, 2023, litigation provisions of

￦

29,707 million for pending lawsuits and unasserted claims are recorded as liabilities for potential loss in the ordinary course of business. The final outcomes of the cases cannot be estimated as of December 31, 2023.

(7)

Under the agreement of bond issuance and borrowings, the Group is required to maintain certain financial ratios such as debt-to-equity ratio, use the funds for the designated purpose

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

and report to the creditors periodically. The covenant also contains restriction on provision of additional collateral and disposal of certain assets.

(8)

As of December 31, 2023, the Group participates in Algerie Sidi Abdela new town development consortium (percentage of ownership: 2.5%) and has joint liability with other consortium participants.

(9)

As of December 31, 2023, contract amount of property and equipment acquisition agreement made but not yet recognized amounts to

￦

489,231 million (202

￦

1,294,823 million).

(10)

As of December 31, 2023, there are derivatives generated by the Group granting Drag-Along Right to financial investors participating in paid-in capital increase of K Bank (Note 7).

(11)

The Group has an agreement with a transferor participated in share transfer agreement of MILLE Co., Ltd. As per the conditions of the agreement, the transferor may exercise Put Option for the ordinary shares it owns (Note 7).

(12)

The Group entered into an agreement with financial investors of Epsilon Global Communications Pte. If certain conditions are not met in the future as disclosed in the terms and conditions of the agreement, financial investors may exercise Tag-Along Right, Drag-Along Right and the right to sell shares for the convertible preferred shares it owns (Note 7).

(13)

The Group has an obligation for additional contributions as per agreement to Future Innovation Private Equity Fund No.3 and others. As of December 31, 2023, remaining amount of

￦

4,132 million and USD 30,350 thousand will be invested through the Capital Call method in the future.

(14)

The Group has the amount of

￦

201,615 million (40%) of joint responsibility obligation and

￦

302,423 million (60%) of obligation to provide financial support as a construction investor during the construction period with respect to K Defense Co., Ltd. established in accordance with the Private Investment Act on Social Infrastructure. During the operating period, the Group has the amount of

￦

438,312 million (100%) of obligation to provide financial support as an operating investor.

(15)

During the prior period, the Group entered into a stock sale contract with HYUNDAI MOBIS and HYUNDAI MOTOR COMPANY. If a certain period of time has elapsed from the date of the contract and the acquired stocks are to be disposed to a third party, HYUNDAI MOBIS and HYUNDAI MOTOR COMPANY may exercise a preferential purchase right to designate a buyer with priority.

(16)

During the prior period, the Group entered into an agreement with LS Cable & System Ltd., which participated in the stock acquisition contract of KT Submarine Co., Ltd. (formerly KT Submarine Co., Ltd.). As per the agreement, the Group may exercise a put-option to LS Cable & System Ltd in the future (Note 7).

(17)

During the period, the Group entered into an agreement with equity investors which participated in the stock acquisition contract of KT cloud Co., Ltd., Under the agreement, in specific occasion, equity investors may exercise a Tag-along or put-option to the Group in the future.

(18)

The Group has the obligation of paying Minimum Guarantee as utilizing product bundling of Tving Co.,Ltd. and the right to be paid certain proportion of the excess as per agreement.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

20.

Leases

Information of leases in which the Group is a lessee is as follows. Information when the Group is a lessor is described in Note 11.

(1)

Amounts recognized in the consolidated statements of financial position

The consolidated statement of financial position shows the following amounts relating to leases:


(in millions of Korean won)	December 31, 2022		December 31, 2023
Right-of-use assets
Property and building	￦	1,081,067	￦	1,019,537
Machinery and communication line facilities		50,794		89,150
Others		148,473		196,276

Total	￦	1,280,334	￦	1,304,963


(in millions of Korean won)	December 31, 2022		December 31, 2023
Lease liabilities 1
Current	￦	315,892	￦	307,868
Non-Current		856,146		872,042

Total	￦	1,172,038	￦	1,179,910

Included in the line items ‘Other current liabilities and other non-current liabilities’ in the consolidated statements of financial position (Notes 9).

For the years ended December 31, 2022 and 2023, Right-of-use assets related to leases increased by

￦

405,453 million and

￦

440,552 million, respectively.

(2)

Amounts recognized in the consolidated statements of profit or loss

The consolidated statement of profit or loss relating to leases for the year ended December 31, 2021,2022 and 2023 are as follows:


(in millions of Korean won)	December 31, 2021		December 31, 2022		December 31, 2023
Depreciation of Right-of-use assets
Property and building	￦	303,984	￦	305,120	￦	297,571
Machinery and communication line facilities		41,794		31,140		32,794
Others		52,938		59,954		72,372

Total	￦	398,716	￦	396,214	￦	402,737

Depreciation of Investment Properties	￦	1,794	￦	15	￦	—
Interest expense relating to lease liabilities		36,651		41,469		52,035
Expense relating to short-term leases		7,984		12,876		8,804
Expense relating to leases of low-value assets that are not short-term leases		26,033		26,813		26,290
Expense relating to variable lease payments not included in lease liabilities		8,400		4,827		9,288

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

The total cash outflow for leases for the year ended December 31, 2023 amounts to

￦

500,392 million (2021:

￦

468,360 million, 2022:

￦

464,337 million).

21.	Share Capital

As of December 31, 2022 and 2023, the Group has 1,000,000,000 shares authorized to issue and details are as follows:

December 31, 2022

December 31, 2023

Number of

issued

Par value

per share

(Korean won)

Ordinary
Shares

(in millions of

Korean won)

Number of

issued
shares

Par value

per share

(Korean won)

Ordinary
Shares

(in millions of

Korean won)

Ordinary shares

261,111,808

￦

5,000

￦

1,564,499

257,860,760

￦

5,000

￦

1,564,499

The Group retired 55,039,007 treasury shares against retained earnings.

Based on the local regulations

in Korea, upon retirement of shares, the Company has decreased the

number of

issued but

has

not

decreased

the ordinary shares

capital

22.	Retained Earnings

Details of retained earnings as at December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022		December 31, 2023
Legal reserve 1	￦	782,249	￦	782,249
Voluntary reserves 2		4,651,362		4,651,362
Unappropriated retained earnings		8,821,705		9,042,256

Total	￦	14,255,316	￦	14,475,867

The Commercial Code of the Republic of Korea requires the Controlling Company to appropriate, as a legal reserve, an amount equal to a minimum of 10% of cash dividends paid until such reserve equals 50% of its issued share capital. The reserve is not available for the payment of cash dividends but may be transferred to share capital with the approval of the Controlling Company’s Board of Directors or used to reduce accumulated deficit, if any, with the ratification of the Controlling Company’s majority shareholders.

The reserves of research and development of human resources in other surplus reserves are separately accumulated on disposal of retained earnings on tax filing adjustments when calculating income taxes in accordance with regulations of Tax Reduction and Exemption Control Act of Korea. Reversal of the reserves according to the relevant tax law can be paid out as dividends

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

23.	Accumulated Other Comprehensive Income and Other Components of Equity

(1)

As of December 31, 2022 and 2023, the details of the Controlling Company’s accumulated other comprehensive income are as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Changes in investments in associates and joint ventures	￦	(11,752	)	￦	4,023
Gain (loss) on derivatives valuation		(7,109	)		(29,361	)
Gain (loss) on valuation of financial assets at fair value through other comprehensive income		(52,100	)		73,928
Exchange differences on translation for foreign operations		(6,815	)		3,817

Total	￦	(77,776	)	￦	52,407

(2)

Changes in accumulated other comprehensive income for the years ended December 31, 2022 and 2023, are as follows:


	2022
( in millions of Korean won)	Beginning			Increase/ decrease			Reclassification to gain or loss			Ending
Changes in investments in associates and joint ventures	￦	(3,461	)	￦	(8,291	)	￦	—		￦	(11,752	)
Gain (loss) on derivatives valuation		25,031			63,281			(95,421	)		(7,109	)
Gain on valuation of financial assets at fair value through other comprehensive income		108,685			(160,785	)		—			(52,100	)
Exchange differences on translation for foreign operations		(12,786	)		5,971			—			(6,815	)

Total	￦	117,469		￦	(99,824	)	￦	(95,421	)	￦	(77,776	)


	2023
(in millions of Korean won)	Beginning			Increase (decrease)		Reclassification to gain or loss			Ending
Changes in investments in associates and joint ventures	￦	(11,752	)	￦	15,775	￦	—		￦	4,023
Gain (loss) on derivatives valuation		(7,109	)		15,690		(37,942	)		(29,361	)
Gain (loss) on valuation of financial assets at fair value through other comprehensive income		(52,100	)		126,028		—			73,928
Exchange differences on translation for foreign operations		(6,815	)		10,632		—			3,817

Total	￦	(77,776	)	￦	168,125	￦	(37,942	)	￦	52,407

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(3)

The Group’s other components of equity as at December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Treasury stock	￦	(202,295	)	￦	(398,075	)
Gain or loss on disposal of treasury stock 1		(41,503	)		3,220
Share-based payments		6,222			8,773
Equity transactions within consolidated entities 2		(334,576	)		(416,336	)

Total	￦	(572,152	)	￦	(802,418	)

The amount directly reflected in equity is

￦

101 million for the year ended December 31, 2023 (2022:

￦

14,886 million).

Profit or loss incurred from transactions with non-controlling interest and investment difference incurred from changes in ownership of subsidiaries are included.

(4)

As of December 31, 2022 and 2023, the details of treasury stock are as follows:


	December 31, 2022		December 31, 2023
Number of shares (in shares)		5,069,130		11,447,338
Amounts (in millions of Korean won)	￦	202,295	￦	398,075

Treasury stocks held as of December 31, 2023, are expected to be used for stock compensation for the Group’s directors, employees, and other purposes.

24.	Share-based Payments

(1)

Details of share-based payments granted by the Controlling to executives and employees, including the CEO, by the resolution of the Board of Directors for the years ended December 31, 2022 and 2023, are as follows:


		2022
(in share)		16th grant
Grant date		June 9, 2022
Grantee		CEO, internal directors, external directors, executives
Vesting conditions		Service condition: 1 year Non-market performance condition: achievement of performance
Fair value per option (in Korean won)		￦ 36,941
Total compensation costs (in Korean won)		￦ 9,442 million
Exercise date		July 17, 2023
Valuation method		Fair value method

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


		2023
(in share)		17th grant
Grant date		June 15, 2023, Oct 17, 2023
Grantee		CEO, internal directors, external directors, executives
Vesting conditions		Service condition: 1 year Non-market performance condition: achievement of performance
Fair value per option (in Korean won)		￦ 30,205
Total compensation costs (in Korean won)		￦ 7,262 million
Estimated exercise date (exercise date)		During 2024
Valuation method		Fair value method

(2)

Changes in the number of stock options and the weighted-average exercise price as at December 31, 2022 and 2023, are as follows:


(In share)	2022
	Beginning		Grant		Expired			Exercised 1			Ending		Number of shares exercisable
15th grant		284,209		—		(155,286	)		(128,923	)		—		—
16th grant		—		258,509		—			—			258,509		—

Total		284,209		258,509		(155,286	)		(128,923	)		258,509		—

(In share)	2023
	Beginning		Grant		Expired			Exercised 1			Ending		Number of shares exercisable
16th grant		258,509		—		(105,859	)		(131,690	)		20,960		—
17th grant		—		307,182		—			—			307,182		—

Total		258,509		307,182		(105,859	)		(131,690	)		328,142		—

The weighted average price of ordinary shares at the time of exercise, during the year ended December 31, 2023 is

￦

29,550 (2022:

￦

35,450).

25.	Revenue from Contracts with Customers, Other Income and Relevant Contract Assets and Liabilities

(1)

The Group has recognized the following amounts relating to revenue and other income in the statement of profit or loss:


(in millions of Korean won)	2021		2022		2023
Revenue from contracts with customers	￦	24,712,128	￦	25,432,727	￦	26,063,185
Revenue from other sources		185,877		206,128		224,016
Other income (Note 26)		307,654		595,351		308,044

Total revenue and other income	￦	25,205,659	￦	26,234,206	￦	26,595,245

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2) Operating revenues and other income for the years ended December 31, 2021, 2022 and 2023 are as follows:


(in millions of Korean won)	2021		2022		2023
Mobile services	￦	6,936,485	￦	7,013,889	￦	7,140,333
Fixed-line services		4,960,338		5,056,513		5,142,359
Fixed-line and VoIP telephone services		1,465,059		1,378,265		1,249,024
Broadband Internet access services		2,343,591		2,504,833		2,578,558
Data communication services		1,151,689		1,173,415		1,314,777
Media and content		2,800,630		3,099,776		3,206,521
Financial services		3,661,896		3,836,589		3,967,763
Sale of goods		3,532,973		3,393,646		3,292,514
Others		3,313,337		3,833,793		3,845,755

Total	￦	25,205,659	￦	26,234,206	￦	26,595,245

Mobile and fixed-line service

Telecommunication service revenues include mobile and fixed-line (e.g., fixed-line and VoIP telephone, broadband internet access services and data communication services). These services represent a series of distinct services that are considered a separate performance obligation. Service revenue is recognized when services are provided, based upon either usage (e.g., minutes of traffic/bytes of data processed) or period of time (e.g., monthly service fees).

Media and content services

Revenue from media and content services primarily consists of installation fees and basic monthly charges of IPTV and satellite TV services, as well as revenue from digital content distribution, digital music streaming and downloading. Media and contents services revenue are recognized when services are provided, based upon either usage or period of time.

Financial services

Financial services primarily include commissions for merchant fees paid by merchants to credit card companies for processing transactions. Revenue from the commission is recognized when the service obligation is performed.

Sale of goods

Revenue from sale of goods, primarily handsets related to our mobile services is recognized when a performance obligation is satisfied by transferring promised goods to customers.

(3)

Contract assets and liabilities recognized in relation to the revenues from contracts with customers, are as follows:


(in millions of Korean won)	December 31, 2022		December 31, 2023
Contract assets 1	￦	963,133	￦	1,130,745
Contract liabilities 1		344,869		311,023
Deferred revenue 2	￦	81,653	￦	81,067

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

The Group recognized contract assets of

￦

308,821million and contract liabilities of

￦

32,274 million for long-term construction contract as of December 31, 2023 (2022: contract assets of

￦

160,880 million and contract liabilities of

￦

60,762 million). The Group recognizes contract assets as trade receivables and other receivables, and contract liabilities as other current liabilities.

Deferred revenue recognized relating to government grant is excluded.

(4)

The contract costs recognized as assets are as follows:


(in millions of Korean won)	2021		2022		2023
Incremental cost of contract establishment	￦	1,726,401	￦	1,744,096	￦	1,656,711
Cost of Contract performance		74,843		73,582		70,757

As at December 31, 2023, the Group recognized

￦

1,759,586 million (2021:

￦

1,842,621 million, 2022:

￦

1,793,013 million) of operating expenses related to contract cost assets.

(5)

The recognized revenue arising from carried-forward contract liabilities from prior year is as follows:


(in millions of Korean won)	2021		2022		2023
Revenue recognized that was included in the contract liabilities balance at the beginning of the year
Allocation of the transaction price	￦	275,965	￦	246,843	￦	213,609
Deferred revenue of joining/installment fee		42,100		44,204		41,824

Total	￦	318,065	￦	291,047	￦	255,433

26.	Other Income

Other income for the years ended December 31, 2021, 2022 and 2023, are as follows:


(in millions of Korean won)	2021		2022		2023
Gains on disposal of property and equipment and investment properties	￦	54,007	￦	52,603	￦	22,447
Gains on disposal of intangible assets		1,726		622		1,727
Gain on disposal of right-of-use assets		3,138		3,326		3,580
Property and Equipment loss recovery income		148,927		159,849		152,712
Income from government subsidies		43,822		44,473		40,725
Gain on disposal of investments in associates		5		38,319		6,982
Gain on disposal of investments in subsidiaries		244		216,591		28,825
Others 1		55,785		79,568		51,046

Total	￦	307,654	￦	595,351	￦	308,044

Certain amounts that were previously reported in the table above have been grouped as Others.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

27.	Operating Expenses

(1)

Operating expenses for the years ended December 31, 2021, 2022 and 2023, are as follows:


(in millions of Korean won)	2021		2022			2023
Employee benefit cost	￦	4,215,810	￦	4,495,885		￦	4,556,832
Depreciation		2,605,594		2,637,463			2,723,610
Depreciation of right-of-use assets		398,716		396,214			402,737
Amortization of intangible assets		603,327		622,202			683,784
Commissions		1,125,944		1,295,434			1,264,729
Interconnection charges		507,567		479,500			436,598
International interconnection fee		192,008		186,253			140,433
Purchase of inventories		3,753,792		3,656,040			3,595,345
Changes of inventories		20,491		(195,046	)		(203,071	)
Sales commission		2,343,375		2,353,909			2,353,318
Service cost 1		2,296,324		2,334,386			2,229,709
Utilities		364,373		368,348			544,675
Taxes and dues		268,651		276,962			250,651
Rent		123,246		160,848			167,576
Insurance premium		66,717		68,245			66,737
Installation fee		154,542		150,140			174,238
Advertising expenses		171,400		195,519			153,750
Allowance for bad debts		82,329		115,358			150,549
Card service cost		3,114,047		3,127,673			3,189,376
Loss on disposal of property and equipment		71,417		81,415			72,710
Loss on disposal of intangible assets		3,885		7,015			5,328
Loss on disposal of right-of-use assets		11,457		2,348			2,115
Loss on disposal of investments in subsidiaries		13,727		—			—
Impairment loss on property and equipment		2,115		16,094			7,871
Impairment loss on intangible assets		3,747		30,965			236,206
Donations		10,981		15,642			24,664
Other allowance for bad debts		28,066		17,551			34,112
Others		952,614		1,369,686			1,902,214

Total	￦	23,506,262	￦	24,266,049		￦	25,166,796

1	Service cost is mainly recorded by purchase of service for system implementation and contents service.

(2)

Details of employee benefit cost for the years ended December 31, 2021, 2022 and 2023, are as follows:


(in millions of Korean won)	2021		2022		2023
Salaries & Wages	￦	3,837,359	￦	4,161,874	￦	4,231,781
Post-employment benefits(Defined benefit plan)		236,831		225,404		183,026
Post-employment benefits(Defined contribution plan)		71,068		72,576		85,174
Share-based payment		47,415		16,799		15,450
Others		23,137		19,232		41,401

Total	￦	4,215,810	￦	4,495,885	￦	4,556,832

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Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

28.	Financial Income and Costs

(1)

Details of financial income for the years ended December 31, 2021, 2022 and 2023, are as follows:


(in millions of Korean won)	2021		2022		2023
Interest income	￦	273,460	￦	271,925	￦	279,607
Gain on foreign currency transactions		19,976		67,976		27,407
Gain on foreign currency translation		32,768		43,092		11,944
Gain on derivative transactions		2,215		50,668		12,304
Gain on valuation of derivatives		255,149		182,998		49,881
Gain on disposal of trade receivables		—		—		3,441
Gain on valuation of financial instruments		90,653		31,032		32,477
Others		52,062		42,737		69,216

Total	￦	726,283	￦	690,428	￦	486,277

(2)

Details of financial costs for the years ended December 31, 2021, 2022 and 2023, are as follows:


(in millions of Korean won)	2021		2022		2023
Interest expenses	￦	263,389	￦	293,854	￦	356,345
Loss on foreign currency transactions		13,105		81,171		34,281
Loss on foreign currency translation		213,689		200,109		95,730
Loss on derivative transactions		6,287		24,331		417
Loss on valuation of derivatives		15,947		21,601		6,598
Loss on disposal of trade receivables		22,712		62,697		17,980
Loss on valuation of financial instruments		25,994		65,660		55,049
Others		2,207		485		2,282

Total	￦	563,330	￦	749,908	￦	568,682

29.	Deferred Income Tax and income Tax Expense

(1)

The analysis of deferred tax assets and deferred tax liabilities as at December 31, 2022 and 2023, is as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Deferred tax assets
Deferred tax assets to be recovered within 12 months	￦	398,710		￦	404,234
Deferred tax assets to be recovered after more than 12 months		1,907,690			1,824,099

Deferred tax assets before offsetting		2,306,400			2,228,333

Deferred tax liabilities
Deferred tax liabilities to be recovered within 12 months		(586,522	)		(491,817	)
Deferred tax liabilities to be recovered after more than 12 months		(2,108,438	)		(2,116,346	)

Deferred tax liabilities before offsetting		(2,694,960	)		(2,608,163	)

Deferred tax assets after offsetting	￦	579,090		￦	614,500

Deferred tax liabilities after offsetting	￦	967,650		￦	994,330

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2)

The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:


(in millions of Korean won)	2022
	Beginning			Statement of profit or loss			Other comprehensive income			Ending
Deferred tax liabilities
Investments in subsidiaries, associates and joint ventures		(240,633	)		(18,299	)		3,748			(255,184	)
Depreciation and impairment loss		(88,588	)		(62,845	)		—			(151,433	)
Plan assets		(538,928	)		(5,294	)		1,322			(542,900	)
Advanced depreciation provision		(339,005	)		(182,934	)		—			(521,939	)
Contract assets		(493,917	)		69,615			—			(424,302	)
Financial assets at fair value through profit or loss		(336	)		(73	)		(11	)		(420	)
Financial assets at fair value through other comprehensive income		(47,521	)		(71,396	)		58,288			(60,629	)
Others		(623,744	)		(111,135	)		(3,274	)		(738,153	)

Total	￦	(2,372,672	)	￦	(382,361	)	￦	60,073		￦	(2,694,960	)

Deferred tax assets
Depreciation and impairment loss		225,821			(36,989	)		—			188,832
Contract liabilities		148,454			(27,165	)		—			121,289
Defined benefit liabilities		571,336			(22,423	)		(67,055	)		481,858
Provisions		172,871			(20,894	)		(22	)		151,955
Others		899,543			351,317			8,635			1,259,495

Total	￦	2,018,025		￦	243,846		￦	(58,442	)	￦	2,203,429

Temporary difference, net		(354,647	)		(138,515	)		1,631			(491,531	)
Tax credit carryforwards		134,417			(31,446	)		—			102,971

Total net balance	￦	(220,230	)	￦	(169,961	)	￦	1,631		￦	(388,560	)

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


(in millions of Korean won)	2023
	Beginning			Statement of profit or loss			Other comprehensive income			Ending
Deferred tax liabilities
Investments in subsidiaries, associates and joint ventures		(255,184	)		(7,821	)		(7,225	)		(270,230	)
Depreciation and impairment loss		(151,433	)		39,309			—			(112,124	)
Plan assets		(542,900	)		8,367			826			(533,707	)
Advanced depreciation provision		(521,939	)		3,859			—			(518,080	)
Contract assets		(424,302	)		2,478			—			(421,824	)
Financial assets at fair value through profit or loss		(420	)		461			43			84
Financial assets at fair value through other comprehensive income		(60,629	)		(53	)		(41,945	)		(102,627	)
Others		(738,153	)		90,876			(2,378	)		(649,655	)

Total	￦	(2,694,960	)	￦	137,476		￦	(50,679	)	￦	(2,608,163	)

Deferred tax assets
Depreciation and impairment loss		188,832			(71,689	)		(397	)		116,746
Contract liabilities		121,289			(9,311	)		—			111,978
Defined benefit liabilities		481,858			(6,705	)		40,838			515,991
Provisions		151,955			(5,784	)		—			146,171
Others		1,259,495			(53,459	)		2,141			1,208,177

Total	￦	2,203,429		￦	(146,948	)	￦	42,582		￦	2,099,063

Temporary difference, net		(491,531	)		(9,472	)		(8,097	)		(509,100	)
Tax credit carryforwards		102,971			26,299			—			129,270

Total net balance	￦	(388,560	)	￦	16,827		￦	(8,097	)	￦	(379,830	)

(3)

The tax impacts recognized directly to equity as of December 31, 2021, 2022, and 2023, are as follows:


	December 31, 2021									December 31, 2022									December 31, 2023
(in millions of Korean won)	Before recognition			Tax effect			After recognition			Before recognition			Tax effect			After recognition			Before recognition			Tax effect			After recognition
Gain (loss) on valuation of financial assets at fair value through other comprehensive income	￦	163,892		￦	(34,112	)	￦	129,780		￦	(216,862	)	￦	58,288		￦	(158,574	)	￦	163,750		￦	(41,945	)	￦	121,805
Gain (loss) on valuation of hedge instruments		6,916			(1,644	)		5,272			(42,510	)		11,180			(31,330	)		(30,168	)		7,555			(22,613	)
Remeasurements of net defined benefit liabilities		74,518			(18,696	)		55,822			247,162			(65,733	)		181,429			(179,129	)		41,664			(137,465	)
Share of gain (loss) of associates and joint ventures, and others		(34,909	)		9,097			(25,812	)		(14,931	)		3,748			(11,183	)		28,715			(7,225	)		21,490
Exchange differences on translation for foreign operations		683			(178	)		505			23,316			(5,852	)		17,464			32,376			(8,146	)		24,230
Gain or loss on disposal of treasury stock		(15,657	)		4,080			(11,577	)		(59,308	)		14,886			(44,422	)		402			(101	)		301

Total	￦	195,443		￦	(41,453	)	￦	153,990		￦	(63,133	)	￦	16,517		￦	(46,616	)	￦	15,946		￦	(8,198)		￦	7,748

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(4)

Details of income tax expense for the years ended December 31, 2021, 2022 and 2023, are calculated as follows:


(in millions of Korean won)	2021		2022		2023
Current income tax expense	￦	289,471	￦	335,796	￦	347,265
Impact of change in deferred taxes		229,545		169,961		(16,827	)

Income tax expense	￦	519,016	￦	505,757	￦	330,438

(5)

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the entities as follows:


(in millions of Korean won)	2021			2022			2023
Profit before income tax expense	￦	1,978,411		￦	1,891,392		￦	1,302,620

Statutory income tax expense	￦	533,701		￦	509,771		￦	333,530
Tax effect
Income not taxable for taxation purposes		(4,307	)		(47,550	)		(30,106	)
Non-deductible expenses		20,570			53,398			26,723
Tax credit		(31,517	)		(54,895	)		(78,459	)
Additional payment of income taxes		(221	)		11,744			(4,991	)
Adjustments in deferred tax from changes in tax rate		—			(41,545	)		564
Tax effect and adjustment on consolidation
Goodwill impairment		—			5,809			106,010
Eliminated dividend income form subsidiaries		7,264			—			—
Changes of out-side tax effect		4,738			29,922			4,436
Intangible Asset impairment and amortization		796			5,276			5,892
Reversal expenses of contract cost assets		(2,932	)		(4,800	)		9,281
Acquisition and disposition of businesses		(5,128	)		—			—
Others		(3,948	)		38,627			(42,442	)

Income tax expense	￦	519,016		￦	505,757		￦	330,438

(6)

Details of deferred tax assets and liabilities that are not recognized as at December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	2022		2023
Deductible temporary differences
Investment in subsidiaries, associates, and joint ventures	￦	3,384,295	￦	3,520,173
Unused tax loss		103,326		203,200
Unused Tax credit		1,988		2,338
Others		387,084		437,238

Total	￦	3,876,693	￦	4,162,949

Taxable temporary differences
Investment in subsidiaries, associates, and joint ventures	￦	857,076	￦	903,394
Others		216,660		211,201

Total	￦	1,073,736	￦	1,114,595

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(7)

The expected period of expiry for unused tax losses not recognized in deferred tax assets as of December 31, 2022 and 2023, is as follows:


(in millions of Korean won)	2022		2023
2023	￦	72,512	￦	4,484
2024		5,011		2,836
2025		3,701		2,086
2026		2,112		4,541
2027		2,534		2,473
2028		396		6,533
2029		617		743
2030		2,198		713
2031		1,360		756
2032		7,450		—
Atter 2033		5,435		178,035

Total	￦	103,326	￦	203,200

30.	Earnings per Share

(1)

Basic Earnings per Share

Basic earnings per share is calculated by dividing the profit from operations attributable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares purchased by the Group and held as treasury stock.

Basic earnings per share from operations for the years ended December 31, 2021, 2022 and 2023, is calculated as follows:


	2021		2022		2023
Profit attributable to ordinary shares of owners of the Controlling Company (in millions of Korean won)	￦	1,354,537	￦	1,259,686	￦	993,325
Weighted average number of ordinary shares outstanding (in number of shares)		235,201,782		242,235,332		249,470,072
Basic earnings per share (in Korean won)	￦	5,759	￦	5,200	￦	3,982

Diluted earnings per share from operations is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The

Group

has dilutive potential ordinary shares from convertible bond and other share-based

compensat

ion

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2)

Diluted Earnings per Share

Diluted earnings per share from operations is calculated by adjusting the weighted average number of ordinary shares outstanding assuming that all dilutive potential ordinary shares are converted into ordinary shares. The Group has dilutive potential ordinary shares from convertible bonds, convertible preferred stock and other share-based payments:


	2021		2022			2023
Profit attributable to ordinary shares of owners of the Controlling Company (in millions of Korean won)	￦	1,354,537	￦	1,259,686		￦	993,325
Adjustment to net income attributable to ordinary shares (in millions of Korean won)		—		(496	)		(827	)
Diluted profit attributable to ordinary shares (in millions of Korean won)		1,354,537		1,259,190			992,498
Number of dilutive potential ordinary shares outstanding (in number of shares)		483,760		91,931			119,263
Weighted average number of ordinary shares outstanding (in number of shares)		235,685,542		242,327,263			249,589,335
Diluted earnings per share (in Korean won)	￦	5,747	￦	5,196		￦	3,977

Diluted earnings per share is earnings per outstanding of ordinary shares and dilutive potential ordinary shares. Diluted earnings per share is calculated by dividing adjusted profit for the year by the sum of the number of ordinary shares and dilutive potential ordinary shares. Convertible bonds and convertible preferred stocks without dilutive effects are excluded from the calculation.

31.

Dividend

The dividends paid by the

Parent

in 2021, 2022 and 2023 were

￦

326,487 million (

￦

1,350 per share),

￦

450,394 million (

￦

1,910 per share),

￦

501,844 million (

￦

1,960 per share), respectively. A dividend in respect of the year ended December 31, 2023, of

￦

1,960 per share, amounting to a total dividend of

￦

482,970 million, is to be proposed at the shareholders’ meeting on March 28, 2024.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

32.	Cash Generated from Operations

(1)

Cash flows from operating activities for the years ended December 31, 2021, 2022 and 2023, are as follows:


(in millions of Korean won)	2021			2022			2023
1. Profit for the year	￦	1,459,395		￦	1,385,635		￦	972,182
2. Adjustments to reconcile net income
Income tax expense		519,016			505,757			335,367
Interest income 1		(300,900	)		(340,794	)		(392,580	)
Interest expense 1		268,847			320,914			410,566
Dividends income 2		(21,525	)		(14,121	)		(59,758	)
Depreciation		2,643,894			2,687,191			2,773,152
Amortization of intangible assets		604,744			627,261			691,909
Depreciation of right-of-use assets		398,716			396,214			402,737
Provision for severance benefits (defined benefits)		253,491			240,506			196,027
Impairment losses on trade receivables		105,344			132,102			175,244
Share of net profit or loss of associates and joint ventures		(116,061	)		16,821			44,323
Loss(gain) on disposal of associates and joint ventures		1			(38,024	)		(6,982	)
Loss(gain) on the disposal of subsidiaries		13,483			(216,591	)		(28,825	)
Loss(gain) on disposal of right-of-use assets		8,319			(978	)		(1,465	)
Impairment losses on assets held for sale		11			—			—
Impairment loss on property and equipment and investment in properties		2,115			16,094			7,871
Loss (gain) on disposal of property and equipment and investment in properties 3		17,410			(66,317	)		511
Loss on disposal of intangible assets		2,159			6,393			3,601
Loss on impairment of intangible assets		3,747			30,674			236,106
Loss on foreign currency translation		180,921			157,017			83,899
G ain on valuation and settlement of derivatives, net		(235,130	)		(205,381	)		(37,249	)
Gain on disposal of financial assets at fair value through profit or loss		(29,974	)		(2,347	)		(2,225	)
Loss(Gain) on valuation of financial assets at fair value through profit or loss		(64,660	)		44,833			13,920
Loss(gain) on disposal of financial assets at amortized cost 4		(35	)		3			1
Others		84,625			(49,891	)		158,820
3. Change in operating assets and liabilities, net of effects from purchase of controlled entity and sale of engineering division
Decrease(increase) in trade receivables		327,031			(43,787	)		(124,023	)
Increase in other receivables		(328,610	)		(1,598,216	)		(1,085,527	)
Decrease(increase) in other current assets		(89,230	)		(101,947	)		250,569
I ncrease in other non-current assets		(143,087	)		(120,054	)		(86,030	)
Decrease(increase) in inventories		32,798			(179,255	)		(317,531	)
Increase(decrease) in trade payables		289,044			(368,355	)		121,515
Increase in other payables		207,583			1,103,113			829,220
Increase(decrease) in other current liabilities		107,993			(30,375	)		414,436
Decrease in other non-current liabilities		(14,915	)		(1,015	)		(14,272	)
Decrease in provisions		(4,668	)		(22,115	)		(5,083	)
Increase(decrease) in deferred revenue		3,696			(384	)		905
Decrease(increase) in plan assets		(114,631	)		(90,771	)		115,725
Payment of post-employment benefits		(241,350	)		(343,931	)		(329,861	)

4. Cash generated from operations (1+2+3)	￦	5,829,607		￦	3,835,879		￦	5,747,195

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

BC Card CO., Ltd. and other subsidiaries of the Group recognize interest income and expense as operating revenue and expense, respectively, including interest income of

￦

112,973 million (2021:

￦

27,440 million, 2022:

￦

68,869 million) and interest expense of

￦

55,677 million that are recognized as operating revenue and expense, respectively, for the year ended December 31, 2023 (2021:

￦

5,458 million, 2022:

￦

27,060 million).

2	BC Card Co., Ltd. Recognized dividend income as operating revenue, including dividend income of ￦ 1,759 million that is recognized as operating revenue for the year ended December 31, 2023 (2021: ￦ 1,340 million, 2022: ￦ 2,299 million).

3	KT Estate Inc. recognized gain and loss on disposal of investment properties as operating revenue and expense, respectively, including gain on disposal of investment properties of ￦ 49,752 million that is recognized as operating revenue for the year ended December 31, 2023.

KT Investment CO., Ltd. and other subsidiaries of the Group recognized gain and loss on valuation of financial assets at fair value through profit or loss as operating revenue and expense, respectively, including loss on valuation of financial assets at fair value through profit or loss of

￦

11,112 million that is recognized as operating expense for the year ended December 31, 2023.

(2)

Significant transactions not affecting cash flows for the years ended December 31, 2021, 2022 and 2023, are as follows:


(in millions of Korean won)	2021			2022			2023
Reclassification of the current portion of borrowings	￦	1,303,543		￦	1,004,818		￦	1,731,998
Reclassification of construction-in-progress to property and equipment		2,916,888			3,167,965			3,123,611
Reclassification of accounts payable from property and equipment		(149,512	)		(7,055	)		(293,448	)
Reclassification of accounts payable from intangible assets		524,040			(197,389	)		(276,491	)
Reclassification of payable from defined benefit liabilities		69,415			(32,417	)		26,246
Reclassification of payable from plan assets		(60,320	)		28,532			(24,821	)
Disposal of treasury stock related to acquisition of financial assets		—			747,161			—
Acquisition of financial assets related to disposal of a subsidiary		—			250,000			—

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

33.	Changes in Liabilities Arising from Financing Activities

Details of changes in liabilities arising from financing activities, liabilities related to cashflow to be classified as future financing activities, for the years ended December 31, 2021, 2022 and 2023, are as follows:


(in millions of Korean won)	2021
	Beginning			Cash flows			Non-cash											Ending
	Beginning			Cash flows			Newly acquired		Changes in FX rate		Fair Value changes		Acquisition and disposition of businesses		Others			Ending
Borrowing	￦	7,316,298		￦	900,394		￦	52,782	￦	196,890	￦	—	￦	15,994	￦	(44,655)		￦	8,437,703
Lease liabilities		1,143,640			(394,567	)		403,451		3		90		36,840		(30,088)			1,159,369
Derivative liabilities		130,573			(1,712	)		2,637		(4,311)		(4,892)		—		(47,119)			75,176
Derivative assets		(7,606	)		216			—		(189,700)		(17,251)		—		114,888			(99,453	)

Total	￦	8,582,905		￦	504,331		￦	458,870	￦	2,882	￦	(22,053)	￦	52,834	￦	(6,974	)	￦	9,572,795


(in millions of Korean won)	2022
	Beginning			Cash flows			Non-cash											Ending
	Beginning			Cash flows			Newly acquired			Changes in FX rate		Fair Value changes		Acquisition and disposition of businesses		Others		Ending
Borrowing	￦	8,437,703		￦	1,391,321		￦	—		￦	146,108	￦	939	￦	—	￦	30,614	￦	10,006,685
Lease liabilities		1,159,369			(378,684	)		427,398			—		—		—		(36,045)		1,172,038
Derivative liabilities		75,176			(41,197	)		—			19,858		12,941		—		(33,223)		33,555
Derivative assets		(99,453	)		76,280			(754	)		(147,161)		30,341		—		(50,083)		(190,830	)

Total	￦	9,572,795		￦	1,047,720		￦	426,644		￦	18,805	￦	44,221	￦	—	￦	(88,737)	￦	11,021,448


(in millions of Korean won)	2023
	Beginning			Cash flows			Non-cash											Ending
	Beginning			Cash flows			Newly acquired		Changes in FX rate		Fair value changes		Acquisition and disposition of businesses		Others			Ending
Borrowing	￦	10,006,685		￦	106,118		￦	—	￦	45,370	￦	1,719	￦	—	￦	58,273		￦	10,218,165
Lease liabilities		1,172,038			(407,051	)		460,617		—		24		—		(45,719)			1,179,909
Derivative liabilities		33,555			—			—		10,888		9,643		—		(29,539)			24,547
Derivative assets		(190,830	)		48,183			—		32,487		1,788		—		(50,839	)		(159,211	)

Total	￦	11,021,448		￦	(252,750)		￦	460,617	￦	88,745	￦	13,174	￦	—	￦	(67,824)		￦	11,263,410

34.	Segment Information

(1) The management of the Group determines the operating and reporting segments based on the reported information when establishing the business strategy.


Details		Business service
ICT		Mobile/fixed line telecommunication service and convergence business, B2B business and others
Finance		Credit card business
Satellite TV Real estate		Satellite TV business Residential building development and supply
Others		Cable television service, IT, facility security and global business, and others

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2) Details of each segment for the years ended December 31, 2021, 2022 and 2023, are as follows:


	2021
(in millions of Korean won)	Operating revenues			Operating Income			Depreciation and Amortization 1
ICT	￦	18,734,342		￦	1,170,920		￦	3,217,643
Finance		3,526,743			104,511			46,223
Satellite TV		665,081			61,398			60,980
Real estate		336,218			27,498			60,459
Others		6,474,858			390,903			327,202

Total		29,737,242			1,755,230			3,712,507
Elimination 2		(4,531,583	)		(55,833	)		(104,869	)

Consolidated amount	￦	25,205,659		￦	1,699,397		￦	3,607,638


	2022
(in millions of Korean won)	Operating revenues			Operating Income			Depreciation and Amortization 1
ICT	￦	18,697,269		￦	1,347,405		￦	3,105,807
Finance		3,615,307			119,805			47,638
Satellite TV		709,160			19,797			58,413
Real estate		474,954			113,134			65,457
Others		7,960,143			473,276			575,035

T otal		31,456,833			2,073,417			3,852,350
Elimination 2		(5,222,627	)		(105,260	)		(196,471	)

Consolidated amount	￦	26,234,206		￦	1,968,157		￦	3,655,879


	2023
(in millions of Korean won)	Operating revenues			Operating Income			Depreciation and Amortization 1
ICT	￦	18,698,964		￦	1,193,333		￦	3,183,408
Finance		3,723,286			91,591			37,150
Satellite TV		714,574			(70,170	)		52,871
Real estate		499,997			73,496			70,653
Others		8,145,272			97,568			584,738

Total		31,782,093			1,385,818			3,928,820
Elimination 2		(5,186,848	)		42,631			(118,689	)

Consolidated amount	￦	26,595,245		￦	1,428,449		￦	3,810,131

Sum of the amortization of tangible assets, intangible assets, investment properties, and right-of-use assets.

Elimination for operating revenues is the difference between operating revenue included in the CODM report, which is based on Korean IFRS and operating revenue based on IFRS. Elimination for depreciation and amortization and operating revenues also included consolidated adjustments due to intercompany transactions with the group.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(3) Operating revenues for the years ended December 31, 2021, 2022 and 2023 and non-current assets as at December 31, 2022 and 2023 by geographical regions, are as follows:


(In millions of Korean won)	Operating revenues						Non-current assets 1
Location	2021		2022		2023		2022.12.31		2023.12.31
Domestic	￦	25,114,719	￦	26,074,349	￦	26,425,735	￦	20,845,214	￦	20,725,694
Overseas		90,940		159,857		169,510		270,490		183,344

Total	￦	25,205,659	￦	26,234,206	￦	26,595,245	￦	21,115,704	￦	20,909,038

Sum of property and equipment, intangible assets, investment properties and right-of-use assets.

35.	Related Party Transactions

(1) The list of related party of the Group as of December 31, 2023, is as follows:


Relationship		Name of Entity
Associates and joint ventures		There are 54 Associates and joint ventures, and entities listed on the table below has Related Party Transactions

Others 1		Goody Studio Co., Ltd., Rebellion Inc., Digital Pharm Co., Ltd., Mastern No.127 Logispoint Daegu Co., Ltd., KORAMKO No. 143 General Private Real Estate Investment Company

The investment in preferred shares in these entities are accounted for under IFRS 9. Given the Company’s significant influence in the investees, those are included in the list of related parties.

(2) Outstanding balances of receivables and payables in relations to transactions with related parties as of December 31, 2022 and 2023, are as follows:


		December 31, 2022
		Receivables				Payables
(in millions of Korean won)		Trade receivables		Other receivables		Trade payables		Other payables		Lease liabilities
Associates and joint ventures	K Bank, Inc.	￦	682	￦	258,999	￦	—	￦	299	￦	—
	Little Big Pictures		1,454		7,645		—		9		—
	K-Realty 11th Real Estate Investment Trust Company		151		1,283		—		—		8,824
	Others		2,285		2		3,235		2,932		—

Total		￦	4,572	￦	267,929	￦	3,235	￦	3,240	￦	8,824

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


		December 31, 2023
		Receivables						Payables
(in millions of Korean won)		Trade receivables		Other receivables		Lease receivables		Trade payables		Other payables		Lease liabilities
Associates and joint ventures	K Bank, Inc.	￦	862	￦	326,006	￦	769	￦	—	￦	299	￦	—
	Little Big Pictures		232		3,473		—		9		6		—
	K-Realty 11th Real Estate Investment Trust Company		110		1,283		—		—		—		6,732
	K-Realty No.3 Real Estate General Private Placement Investment Company		4,576		—		—		—		—		—
	Others		2,044		162		—		2,900		3,029		—

Total		￦	7,824	￦	330,924	￦	769	￦	2,909	￦	3,334	￦	6,732

(3) Significant transactions with related parties for the years ended December 31, 2021, 2022 and 2023, are as follows:


		2021
(in millions of Korean won)		Sales		Purchases 1
Associates and joint ventures	K- Realty CR-REITs No.1	￦	238,847	￦	1,308
	IGIS Professional Investors Private Investment Real Estate Investment LLC No. 395		5,000		—
	K Bank, Inc.		24,247		15,164
	Others 2,3		28,092		21,302

Total			296,186		37,774


		2021
(in millions of Korean won)		Interest income		Interest expense		Dividend income
Associates and joint ventures	K- Realty CR-REITs No.1		￦ —		￦ 205		￦ 40,142
	Korea Information & Technology Investment Fund (KIF Investment Fund)		223		—		—
	K Bank, Inc.		—		—		—
	Others 2,3		—		—		8,637

Total		￦	223	￦	205	￦	48,779

Amounts include acquisition of property and equipment, and others.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

Transaction amount before OSKENT Co., Ltd., Mission Culture Industry Limited, Sweet and Sour Culture Industry Limited, Alma Mater Culture Industry Limited, and KT Philippines are excluded from associates and joint ventures.

Includes transactions of Oscar Ent. before it was excluded as associates and joint ventures of the Group.


		2022
(in millions of Korean won)		Operating Revenue		Purchases 1
Associates and joint ventures	K- Realty CR-REITs No.1 2	￦	—	￦	—
	K Bank, Inc.		29,536		11,007
	Hyundai Robotics Co., Ltd. 1		94		3,799
	K-Realty 11th Real Estate Investment Trust Company		330		1,674
	Others 3		11,964		37,742
Others	Digital Pharm Co., Ltd.		1		—

Total			41,925		54,222


		2022
(in millions of Korean won)		Acquisition of right-of-use assets		Interest income		Interest expense		Dividend income
Associates and joint ventures	K- Realty CR-REITs No.1 2	￦	—	￦	—	￦	—	￦	45,549
	K Bank, Inc.		—		3,052		—		—
	Hyundai Robotics Co., Ltd. 1		—		—		—		—
	K-Realty 11th Real Estate Investment Trust Company		1,966		—		260		162
	Others 3		—		—		—		9,158

Total		￦	1,966	￦	3,052	￦	260	￦	54,869

Amounts include acquisition of property and equipment, and others.

Includes transactions of the entity before it was excluded as an associate and joint venture of the Group.

Includes transactions of StorySoop Inc. before it was excluded as associates and joint ventures of the Group.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


		2023
(in millions of Korean won)		Operating Revenue		Purchases 1
Associates and joint ventures	K Bank, Inc.	￦	22,701	￦	13,429
	HD Hyundai Robotics Co., Ltd. (formerly Hyundai Robotics Co., Ltd.)		78		182
	K-Realty 11th Real Estate Investment Trust Company		346		2,559
	K-Realty No.3 Real Estate General Private Placement Investment Company		6,216		—
	Others 2 3		21,308		42,169
Others	Digital Pharm Co., Ltd.		1		—

Total			50,650		58,339


		2023
(in millions of Korean won)		Acquisition of right-of-use assets		Interest income		Interest expense		Dividend income
Associates and joint ventures	K Bank, Inc.	￦	—	￦	8,264	￦	—	￦	—
	HD Hyundai Robotics Co., Ltd.(formerly Hyundai Robotics Co., Ltd.)		—		—		—		—
	K-Realty 11th Real Estate Investment Trust Company		7		—		261		507
	Others 2 3		—		—		—		1,279

Total		￦	7	￦	8,264	￦	261	￦	1,786

Amounts include acquisition of property and equipment, and others.

Includes transactions of KD Living Co., Ltd. before it was included as a subsidiary.

Includes transactions of FUNDA Co., Ltd, Maruee Limited Company Specializing in the Cultural Industry, Mastern No.127 Logispoint Daegu Co., Ltd. before it was excluded as associates and joint ventures of the Group.

(4) Key management compensation for the years ended December 31, 2021, 2022 and 2023, consists of:


(in millions of Korean won)	2021		2022		2023
Salaries and other short-term benefits	￦	2,189	￦	1,855	￦	1,494
Post-employment benefits		412		294		153
Share-based compensation		669		976		569

Total	￦	3,270	￦	3,125	￦	2,216

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(5) Fund transactions with related parties for the years ended December 31, 2021, 2022 and 2023, are as follows:


	2021
(in millions of Korean won)	Borrowing transactions 1				Equity contributions in cash
Associates and joint ventures	Borrowings		Repayments		Equity contributions in cash
K- REALTY CR REIT 1	￦	—	￦	15,964	￦	—
K Bank, Inc.		—		—		424,957
Pacific Professional Investors Private Investment Real Estate Investment LLC No. 55		—		—		11,000
KT Young Entrepreneurs DNA Investment Fund		—		—		8,400
Mastern KT Multi-Family Real Estate Private Equity Investment Fund 1		—		—		6,055
KT-IBKC Future Investment Fund 1		—		—		(5,700	)
Others 2		—		—		18,176

Total	￦	—	￦	15,964	￦	462,888

Borrowing transactions include lease transactions.

Others include transactions before exclusion as associates and joint ventures of the Group.


	2022
(in millions of Korean won)	Borrowing transactions 1				Equity contributions in cash
Associates and joint ventures	Borrowings		Repayments		Equity contributions in cash
Megazone Cloud Corporation	￦	30,000	￦	—	￦	130,001
IBK-KT Emerging Digital Industry Investment Fund		—		—		10,800
Mastern KT Multi-Family Real Estate Private Equity Investment Fund 1		—		—		18,859
IGIS No. 468-1 General Private Real Estate Investment Company		—		—		25,000
K-Realty 11th Real Estate Investment Trust Company		1,916		771		—
Others		—		—		93,478

Total	￦	31,916	￦	771	￦	278,138

Lease transactions are included in borrowing transactions.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


	2023
(in millions of Korean won)	Borrowing transactions 1				Equity contributions in cash
Associates and joint ventures	Borrowings		Repayments		Equity contributions in cash
K-Realty 11th Real Estate Investment Trust Company	￦	—	￦	1,037	￦	—
STIC Place General Private Placement Real Estate Investment Trust No.2		—		—		20,000
Telco Credit Bureau Co.,Ltd.		—		—		6,500
Pacific geumto no.75 private hybrid asset fund		—		—		19,000
Kiamco Data Center Blind Fund		—		—		15,000
STIC Mixed Asset Investment Trust No.1		—		—		10,930
Others 2		—		—		31,107
Others
Rebellions Co.,Ltd.		—		—		19,998

Total	￦	—	￦	1,037	￦	122,535

Lease transactions are included in borrowing transactions.

Includes transaction details before Daemuga Limited Company Specializing in the Cultural Industry, Maruee Limited Company Specializing in the Cultural Industry were excluded from the associates company.

(6) Provision of collateral and investment agreement and others

Provision of collateral and investment agreement The Group has an obligation to invest in Kiamco Data Center Blind Fund, a related party, and others according to the agreement. As of December 31, 2023 the Company is planning make an additional investment of

￦

107,774 million

(7) As of December 31, 2023, the limit of the credit card contract provided by the Group to K Bank,

Inc. is

￦

1,050 million (December 31, 2022:

￦

1,000 million).

36.	Financial Risk Management

(1) Financial Risk Factors

The Group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures such as cash flow risk.

The Group’s financial policy is set up in the long-term perspective and annually reported to the Board of Directors. The financial risk management is carried out by the Value Management Office, which identifies, evaluates and hedges financial risks. The treasury department in the Value Management Office considers various finance market conditions to estimate the effect from the market changes.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

1) Market risk

The Group’s market risk management focuses on controlling the extent of exposure to the risk in order to minimize revenue volatility. Market risk is a risk that decreases value or profit of the Group’s portfolio due to changes in market interest rate, foreign exchange rate and other factors.

(i) Sensitivity analysis

Sensitivity analysis is performed for each type of market risk to which the Group is exposed. Reasonably possible changes in the relevant risk variable such as prevailing market interest rates, currency rates, equity prices or commodity prices are estimated and if the rate of change in the underlying risk variable is stable, the Group does not alter the chosen reasonably possible change in the risk variable. The reasonably possible change does not include remote or ‘worst case’ scenarios or ‘stress tests’.

(ii) Foreign exchange risk

The Group is exposed to foreign exchange risk arising from operating, investing and financing activities. Foreign exchange risk is managed within the range of the possible effect on the Group’s cash flows. Foreign exchange risk (i.e. foreign currency translation of overseas operating assets and liabilities) unaffecting the Group’s cash flows is not hedged but can be hedged at a particular situation.

f December 31, 2021, 2022 and 2023, if the foreign exchange rate had strengthened/weakened by 10% with all other variables held constant, the effects on profit before income tax and shareholders’ equity would have been as follows:


(in millions of Korean won)	Fluctuation of foreign exchange rate			Impact on profit before income tax 1			Impact on equity
2021.12.31		10	%	￦	(3,433	)	￦	8,692
2021.12.31		-10	%		3,433			(8,692	)
2022.12.31		10	%	￦	(5,841	)	￦	(15,836	)
2022.12.31		-10	%		5,841			15,836
2023.12.31		10	%	￦	(10,313	)	￦	(18,460	)
2023.12.31		-10	%		10,313			18,460

Computed with considering derivatives hedging effect applied by the Group to hedge foreign exchange risk of liabilities in foreign currencies.

The above analysis is a simple sensitivity analysis which assumes that all the variables other than foreign exchange rates are held constant. Therefore, the analysis does not reflect any correlation between foreign exchange rates and other variables, nor the management’s decision to decrease the risk.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

Details of financial assets and liabilities in foreign currencies as at December 31, 2021, 2022 and 2023, are as follows:


(In thousands of foreign currencies)	2021				2022				2023
(In thousands of foreign currencies)	Financial assets		Financial liabilities		Financial assets		Financial liabilities		Financial assets		Financial liabilities
USD		245,759		2,302,642		106,426		2,336,607		139,807		2,271,673
SDR 1		255		722		255		722		254		722
JPY		29,227		30,000,763		32,801		400,002		17,496		400,002
GBP		—		1,005		30		83		—		—
EUR		3,943		10,801		185		7,832		304		7,810
RWF 2		586		—		15,521		13,025		402		—
THB 3		2,160		—		265		—		244		—
TZS 4		1,644		—		1,464		—		21,958		—
BWP 5		93		—		183		—		680		—
HKD 6		—		105		37		—		—		—
VND 7		257,895		—		280,226		—		380,629		—
SGD 8		13		284,000		448		284,000		1,375		—
TWD 9		—		226		—		—		1,685		—
CHF 10		—		161		—		—		—		25
MYR 11		—		—		1		—		—		—
BGN 12		—		—		62		—		—		—
PKR 13		—		—		—		—		114,025		—

Special Drawing Rights.

Rwanda Franc.

Thailand Bhat.

Tanzanian Shilling.

Botswana Pula.

Hong Kong Dollar.

Vietnam Dong.

Singapore Dollar.

Taiwan Dollar.

Swiss Franc.

Ringgit Malaysia.

Bulgarian Lev.

Pakistani rupee

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(iii) Price risk

As of December 31, 2021, 2022 and 2023, the Group is exposed to equity securities price risk because the securities held by the Group are traded in active markets. If the market prices had increased/decreased by 10% with all other variables held constant, the effects on profit before income tax and equity would have been as follows:


(in millions of Korean won)	Fluctuation of price	Impact on profit before income tax			Impact on equity
2021.12.31	10%	￦	2,000		￦	4,588
2021.12.31	- 10 %		(2,000	)		(4,588	)
2022.12.31	10%	￦	2,660		￦	113,948
2022.12.31	-10%		(2,660	)		(113,948	)
2023.12.31	10%	￦	1,473		￦	121,423
2023.12.31	-10%		(1,473	)		(121,423	)

The analysis above is based on the assumption that the equity index had increased/decreased by 10% with all other variables held constant and all the Group’s marketable equity instruments had moved according to the historical correlation with the index. Gain or loss on equity securities classified as financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income can increase or decrease equity.

(iv) Cash flow and fair value interest rate risk

The Group’s interest rate risk arises from liabilities in foreign currency such as foreign currency debentures. Debentures in foreign currency issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by swap transactions. Debentures and borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group sets the policy and operates to minimize the uncertainty of the changes in interest rates and financial costs.

f December 31, 2021, 2022 and 2023, if the market interest rate had increased/decreased by 100 bp with other variables held constant, the effects on profit before income tax and shareholders’ equity would be as follows:


(in millions of Korean won)	Fluctuation of interest rate		Impact on profit before income tax			Impact on equity
2021.12.31		+ 100 bp	￦	753		￦	5,549
2021.12.31		- 100 bp		(731	)		(5,675	)
2022.12.31		+ 100 bp	￦	635		￦	(2,045	)
2022.12.31		- 100 bp		(669	)		2,100
2023.12.31		+ 100 bp	￦	(2,693	)	￦	(4,718	)
2023.12.31		- 100 bp		2,696			5,037

The above analysis is a simple sensitivity analysis which assumes that all the variables other than market interest rates are held constant. Therefore, the analysis does not reflect any correlation between market interest rates and other variables, nor the management’s decision to decrease the risk.

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T Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

2) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s trade receivables from customers, debt securities and others.

Risk management

Credit risk is managed on the Group basis with the purpose of minimizing financial loss. Credit risk arises from the normal transactions and investing activities, where clients or other party fails to discharge an obligation on contract conditions. To manage credit risk, the Group considers the counterparty’s credit based on the counterparty’s financial conditions, default history and other important factors.

Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as outstanding receivables. To minimize such risk, only the financial institutions with strong credit ratings are accepted.

The Group’s investments in debt instruments are considered to be low risk investments. The credit ratings of the investments are monitored for credit deterioration.

Security

For some trade receivables, the Group may obtain security in the form of guarantees or letters of credit, etc. which can be called upon if the counterparty is in default under the terms of the agreement.

Impairment of financial assets

The Group has four types of financial assets that are subject to the expected credit loss model:

•

trade receivables for sales of goods and provision of services,

•

contract assets relating to provision of services,

•

debt investments carried at fair value through other comprehensive income, and

•

other financial assets carried at amortized cost.

While cash equivalents are also subject to the impairment requirement, the identified expected credit loss was immaterial.

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

The maximum exposure to credit risk of the Group’s financial instruments without considering value of collaterals as

f December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022		December 31, 2023
Cash and cash equivalents (except for cash on hand)	￦	2,437,629	￦	2,869,285
Trade and other receivables
Financial assets at amortized costs		7,459,994		8,458,259
Financial assets at fair value through other comprehensive income		129,124		116,198
Contract assets		802,253		832,520
Other financial assets
Derivatives financial assets for hedging		190,830		159,211
Financial assets at fair value through profit or loss		942,274		880,549
Financial assets at fair value through other comprehensive income		5,432		5,913
Financial assets at amortized costs		1,060,058		1,385,921

Total	￦	13,027,594	￦	14,707,856

The Group is exposed to credit risk for financial guarantee contracts. As of December 31, 2023, the Group’s maximum exposure amount is

￦

116,719 million (2022:

￦

26,206 million).

(i) Trade receivables and contract assets

The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets.

The Group measures the expected credit loss by considering the future unrecoverable rate of the remaining balance of trade receivables and other receivables at the end of the reporting period. Each trade receivables and other receivables are classified considering the credit risk characteristics and overdue periods in order to measure expected credit loss. The expected credit loss rate calculation is based on historical payment and credit loss information in relation to revenue for 36 months period up to December 31, 2023. Meanwhile, the credit sales assets of BC Card Co., Ltd., a subsidiary, were judged to have low credit risk, so the expected 12-month credit loss was applied.

The expected credit losses reflect forward-looking information. Provision for impairment as of December 31, 2022 and 2023, are as follows:


	December 31, 2022
(in millions of Korean won)	Less than 6 months			7-12 months			More than 1 years			Total
Expected credit loss rate		5.57	%		25.84	%		67.16	%		—
Total carrying amounts	￦	3,443,163		￦	49,491		￦	207,396		￦	3,700,050
Provision for impairment	￦	(191,668	)	￦	(12,789	)	￦	(139,281	)	￦	(343,738	)


	December 31, 2023
(in millions of Korean won)	Less than 6 months			7-12 months			More than 1 years			Total
Expected credit loss rate		5.43	%		21.72	%		54.55	%		—
Total carrying amounts	￦	3,466,588		￦	68,772		￦	235,129		￦	3,770,489
Provision for impairment	￦	(188,086	)	￦	(14,940	)	￦	(128,264	)	￦	(331,290	)

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Table of Contents

T Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

Details of changes in provisions for impairment of trade receivables the years ended December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	2022			2023
Beginning balance	￦	349,725		￦	343,738
Provision		64,522			69,972
Written-off		(68,298	)		(80,126	)
Others		(2,211	)		(2,294	)

Ending balance	￦	343,738		￦	331,290

As of December 31, 2023, the maximum exposure of the trade receivables carrying amount to credit risk is

￦

3,439,199 million (2022:

￦

3,356,312 million).

Impairment of trade receivable for the years ended December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	2022		2023
Impairment loss Bad debt expenses	￦	64,522	￦	69,972

(ii) Cash equivalents (except for cash on hand)

The Group is also exposed to credit risk in relation cash equivalents. The maximum exposure at the end of the reporting period is the carrying amount of these investments.

(iii) Other financial assets at amortized costs

Other financial assets at amortized cost include time deposits, other long-term financial instruments and others. All of the financial assets at amortized costs are considered to have low credit risk, and the loss allowance recognized during the period was, therefore, limited to 12 months expected losses. Management considers ‘low credit risk’ for other instruments when they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near term.

Details of changes in provisions for impairment of other financial assets at amortized costs for the years ended December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	2022			2023
Beginning balance	￦	201,387		￦	218,543
Provision		65,941			114,501
Written-off		(51,383	)		(150,014	)
Reversal		(850	)		(14,941	)
Others		3,448			15,547

Ending balance	￦	218,543		￦	183,636

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(iv) Financial assets at fair value through other comprehensive income

All of the debt investments at fair value through other comprehensive income are considered to have low credit risk, and the loss allowance recognized during the period was, therefore, limited to 12 months expected losses. Managements consider ‘low credit risk’ for other instruments when they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near term. The maximum exposure at the end of the reporting period is the carrying amount of these investments.

(v) Financial assets at fair value through profit or loss

The Group is also exposed to credit risk in relation to financial assets that are measured at fair value through profit or loss. The maximum exposure at the end of the reporting period is the carrying amount of these investments.

3) Liquidity risk

The Group manages its liquidity risk by liquidity strategy and plans. The Group considers the maturity of financial assets and financial liabilities and the estimated cash flows from operations.

The table below analyzes the Group’s liabilities (including interest expenses) into relevant maturity groups based on the remaining period at the date of the end of each reporting period to the contractual maturity date. These amounts are contractual undiscounted cash flows and can differ from the amount in the consolidated financial statements.


	December 31, 2022
(in millions of Korean won)	Less than 1 year		1-5 years		More than 5 years		Total
Trade and other payables	￦	7,386,703	￦	1,009,559	￦	86,848	￦	8,483,110
Borrowings (including debentures)		2,028,207		6,972,077		2,016,472		11,016,756
Lease liabilities		313,162		615,766		407,833		1,336,761
Other non-derivative financial liabilities		33,279		209,155		93,744		336,178
Financial guarantee contracts 1		21,618		—		4,588		26,206

Total	￦	9,782,969	￦	8,806,557	￦	2,609,485	￦	21,199,011

It is total amount guaranteed by the Group according to guarantee contracts. Cash flow from financial guarantee contracts is classified as the maturity group in the earliest period when the financial guarantee contracts can be executed.

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Table of Contents

T Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


	December 31, 2023
(in millions of Korean won)	Less than 1 year		1-5 years		More than 5 years		Total
Trade and other payables	￦	8,184,036	￦	730,340	￦	8,040	￦	8,922,416
Borrowings (including debentures)		2,922,557		6,027,323		1,743,842		10,693,722
Lease liabilities		313,431		617,561		409,174		1,340,166
Other non-derivative financial liabilities		372,743		747,221		10,073		1,130,037
Financial guarantee contracts 1		13,719		103,000		—		116,719

Total	￦	11,806,486	￦	8,225,445	￦	2,171,129	￦	22,203,060

At the end of the reporting period, the cash outflows and inflows by maturity of the Group’s derivatives held for trading and gross-settled derivatives are as follows:

December 31, 2021

(in millions of Korean won)

Less than 1 year

1-5 years

More than
5 years

Total

Derivatives held for trading

Outflows

￦

—

￦

158,284

￦

—

￦

158,284

Derivatives settled gross

Outflows

￦

843,489

￦

1,857,942

￦

377,302

￦

3,078,733

Inflows

856,508

1,917,236

394,134

3,167,878

December 31, 2022

(in millions of Korean won)

Less than 1 year

1-5 years

More than
5 years

Total

Derivatives held for trading

Outflows

￦

—

￦

101,994

￦

930

￦

102,924

Derivatives settled gross

Outflows

￦

472,005

￦

2,493,858

￦

28,786

￦

2,994,649

Inflows

550,478

2,670,002

37,873

3,258,353


	December 31, 2023
(in millions of Korean won)	Less than 1 year		1-5 years		More than 5 years		Total
Derivatives held for trading 1
Outflows	￦	—	￦	133,293	￦	—	￦	133,293
Inflows		—		—		1,015		1,015
Derivatives settled gross 2
Outflows	￦	741,140	￦	1,227,166	￦	8,126	￦	1,976,432
Inflows		614,066		2,198,958		36,344		2,849,368

During the year ended December 31, 2023, derivative liabilities held-for-trading are classified under the ‘more than one year to less than five years’ category as they are relevant to the fair value of derivatives liabilities related to shareholder-to-share contracts (Note 19).

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

As these derivatives held-for-trading are managed based on net fair value, their contractual maturities are not necessarily taking into consideration to understand the timing of cash flows.

Cash outflow and inflow of gross-settled derivatives are undiscounted contractual cash flow and may differ from the amount in the consolidated statement of financial position.

Meanwhile, as of December 31, 2023, the Group is obligated to invest

￦

107,774 million in

Kiamco Data Center Blind Fund, a related party, and others,

and

￦

4,132

million and USD

30,350

thousand to be paid in the future Capital Call method to Future Innovation Private Equity Fund No.3 (Notes 19 and 35).

(2) Management of Capital Risk

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other shareholders and to maintain an optimal capital structure to reduce the cost of capital.

The Group’s capital structure consists of liabilities including borrowings, cash and cash equivalents, and shareholders’ equity. The treasury department monitors the Group’s capital structure and considers cost of capital and risks related each capital component.

The debt-to-equity ratios as

f December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022			December 31, 2023
Total liabilities	￦	22,577,114		￦	24,249,073
Total equity		18,412,696			18,542,575
Debt-to-equity ratio		123	%		131	%

The Group manages capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as ‘equity’ in the statement of financial position plus net debt.

The gearing ratios as

December 31, 2022 and 2023, are as follows:


(in millions of Korean won, %)	December 31, 2022			December 31, 2023
Total borrowings	￦	10,006,685		￦	10,218,165
Less: cash and cash equivalents		(2,449,062	)		(2,879,554	)

Net debt		7,557,623			7,338,611
Total equity		18,412,696			18,542,575
Total capital		25,970,319			25,881,186
Gearing ratio		29	%		28	%

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Table of Contents

T Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(3)	Offsetting Financial Assets and Financial Liabilities

Details of the Group’s recognized financial assets subject to enforceable master netting arrangements or similar agreements are as follows:


(in millions of Korean won)	December 31, 2022
	Gross assets		Gross liabilities offset			Net amounts presented in the statement of financial position		Amounts not offset					Net amount
	Gross assets		Gross liabilities offset					Financial instruments			Cash collateral		Net amount
Trade receivables	￦	60,512	￦	—		￦	60,512	￦	(44,518	)	￦	—	￦	15,994
Other financial assets		764		(764	)		—		—			—		—

Total	￦	61,276	￦	(764	)	￦	65,012	￦	(44,518	)	￦	—	￦	15,994


(in millions of Korean won)	December 31, 2023
	Gross assets		Gross liabilities offset			Net amounts presented in the statement of financial position		Amounts not offset					Net amount
	Gross assets		Gross liabilities offset					Financial instruments			Cash collateral		Net amount
Trade receivables	￦	78,415	￦	(1,407	)	￦	77,008	￦	(59,148	)	￦	—	￦	17,860
Other financial assets		759		(757	)		2		(2	)		—		—

Total	￦	79,174	￦	(2,164	)	￦	77,010	￦	(59,150	)	￦	—	￦	17,860

These include price subject to netting arrangements on facility interconnection and data sharing among telecommunication companies.

The Group’s recognized financial liabilities subject to enforceable master netting arrangements or similar agreements are as follows:

(in millions of Korean won)

December 31, 2022

Gross
liabilities

Gross
assets

offset

Net amounts
presented in
the statement
of financial

position

Amounts not offset

Net
amount

Financial
instruments

Cash
collateral

Trade payables

￦

47,271

￦

(764

)

￦

46,507

￦

(44,518

)

￦

—

￦

1,989


(in millions of Korean won)	December 31, 2023
	Gross liabilities		Gross assets offset			Net amounts presented in the statement of financial position		Amounts not offset					Net amount
	Gross liabilities		Gross assets offset					Financial instruments			Cash collateral		Net amount
Trade payables	￦	59,602	￦	(757	)	￦	58,845	￦	(56,196	)	￦	—	￦	2,649
Other financial assets		4,362		(1,407	)		2,955		(2,955	)		—		—

Total	￦	63,964	￦	(2,164	)	￦	61,800	￦	(59,151	)	￦	—	￦	2,649

These include price subject to netting arrangements on facility interconnection and data sharing among telecommunication companies.

F-10

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

37.	Fair Value

(1) Fair Value of Financial Instruments by Category

Carrying amount and fair value of financial instruments by category as of December 31, 2022 and 2023, are as follows:


	December 31, 2022				December 31, 2023
(in millions of Korean won)	Carrying amount		Fair value		Carrying amount		Fair value
Financial assets
Cash and cash equivalents	￦	2,449,062		1	￦	2,879,554		1
Trade and other receivables
Financial assets measured at amortized cost 2		7,364,516		1		8,326,229		1
Financial assets at fair value through other comprehensive income		129,124		129,124		116,198		116,198
Other financial assets
Financial assets measured at amortized cost		1,060,058		1		1,385,921		1
Financial assets at fair value through profit or loss		1,064,856		1,064,856		939,661		939,661
Financial assets at fair value through other comprehensive income		1,508,192		1,508,192		1,680,168		1,680,168
Derivative financial assets for hedging		190,830		190,830		159,211		159,211

Total	￦	13,766,638			￦	15,486,942

Financial liabilities
Trade and other payables 3	￦	8,397,264		1	￦	8,317,822		1
Borrowings		10,006,685		9,405,992		10,218,165		9,979,545
Other financial liabilities
Financial liabilities at amortized cost		246,606		1		915,185		1
Financial liabilities at fair value through profit or loss		141,280		141,280		136,106		136,106
Derivative financial liabilities for hedging purpose		33,555		33,555		24,547		24,547

Total	￦	18,825,390			￦	19,611,825

The Group did not conduct fair value estimation since the book amount is a reasonable approximation of the fair value.

Lease receivables are excluded from fair value disclosure in accordance with IFRS 7.

Amounts related to employee benefit plans are included in trade and other payables at the end of previous year.

F-1

Table of Contents

T Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2)

Fair Value Hierarchy

To provide an indication about the reliability of the inputs used in determining fair value, the Group classifies its financial instruments into the three levels prescribed under the accounting standards. Financial instruments that are measured at fair value are categorized by the fair value hierarchy, and the defined levels are as follows:

•

Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.

•

Level 2: The fair value of financial instruments that are not traded in active markets is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

•

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Fair value hierarchy classifications of the financial assets and financial liabilities that are measured at fair value disclosed in fair value as of December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022
(in millions of Korean won)	Level 1		Level 2		Level 3		Total
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	￦	—	￦	129,124	￦	—	￦	129,124
Other financial assets
Financial assets at fair value through profit or loss		26,647		426,140		612,069		1,064,856
Financial assets at fair value through other comprehensive income		1,005,900		5,163		497,129		1,508,192
Derivative financial assets for hedging		—		189,717		1,113		190,830
Investment properties		—		—		5,370,047		5,370,047

Total	￦	1,032,547	￦	750,144	￦	6,480,358	￦	8,263,049

Liabilities
Borrowings	￦	—	￦	9,405,992	￦	—	￦	9,405,992
Other financial liabilities
Financial liabilities at fair value through profit or loss		—		—		141,280		141,280
Derivative financial liabilities for hedging purpose		—		33,555		—		33,555

Total	￦	—	￦	9,439,547	￦	141,280	￦	9,580,827

F-11

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(in millions of Korean won)	December 31, 2023
(in millions of Korean won)	Level 1		Level 2		Level 3		Total
Assets
Trade and other receivables
Financial assets at fair value through other comprehensive income	￦	—	￦	116,198	￦	—	￦	116,198
Other financial assets
Financial assets at fair value through profit or loss		13,911		156,918		768,832		939,661
Financial assets at fair value through other comprehensive income		1,230,936		5,206		444,026		1,680,168
Derivative financial assets for hedging		—		159,211		—		159,211
Investment properties		—		—		5,276,169		5,276,169

Total	￦	1,244,847	￦	437,533	￦	6,489,027	￦	8,171,407

Liabilities
Borrowings	￦	—	￦	9,979,545	￦	—	￦	9,979,545
Other financial liabilities
Financial liabilities at fair value through profit or loss		—		1,545		134,561		136,106
Derivative financial liabilities for hedging purpose		—		24,547		—		24,547

Total	￦	—	￦	10,005,637	￦	134,561	￦	10,140,198

(3)

Transfers Between Fair Value Hierarchy Levels of Recurring Fair Value Measurements

Details of transfers between Level 1 and Level 2 of the fair value hierarchy for recurring fair value measurements

There are no transfers between Level 1 and Level 2 of the fair value hierarchy for the recurring fair value measurements.

Details of changes in Level 3 of the fair value hierarchy for recurring fair value measurements.

F-11

Table of Contents

T Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

Details of changes in Level 3 of the fair value hierarchy for the recurring fair value measurements as of December 31, 2022 and 2023, are as follows:


	2022
	Financial assets						Financial liabilities
(in millions of Korean won)	Financial assets at fair value through profit or loss			Financial assets at fair value through other comprehensive income			Derivative financial assets for hedging		Financial liabilities at fair value through profit or loss
Beginning balance	￦	577,085		￦	323,373		￦	31,565	￦	215,332
Acquisition		226,310			262,408			—		3,046
Reclassification		(8,962	)		8,122			—		(54,921	)
Acquisition and disposition of businesses		—			(40	)		—		—
Disposal		(179,740	)		(97,426	)		(31,565)		—
Amount recognized in profit or loss 1		(2,624	)		18			—		(22,177	)
Amount recognized in other comprehensive income 2		—			674			1,113		—

Ending balance	￦	612,069		￦	497,129		￦	1,113	￦	141,280

The recognition of gains and losses on derivatives financial liabilities (assets) for hedging purposes consists entirely of derivatives valuation losses.

The recognition of gains and losses on financial liabilities measured at fair value through profit or loss consists of derivative valuation losses.


	2023
	Financial assets						Financial liabilities
(in millions of Korean won)	Financial assets at fair value through profit or loss			Financial assets at fair value through other comprehensive income			Derivative financial assets for hedging		Financial liabilities at fair value through profit or loss
Beginning balance	￦	612,069		￦	497,129		￦	1,113	￦	141,280
Acquisition		216,838			10,267			—		—
Reclassification		26,471			(5,532	)		(1,113)		(7,363	)
Acquisition and disposition of businesses		252			—			—		—
Disposal		(44,323	)		(6	)		—		(5,205	)
Amount recognized in profit or loss 1,		(42,475	)		(61	)		—		5,849
Amount recognized in other comprehensive income		—			(57,771	)		—		—

Ending balance	￦	768,832		￦	444,026		￦	—	￦	134,561

The recognition of gains and losses on financial liabilities measured at fair value through profit or loss consists of derivative valuation gains and losses.

F-11

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(4)

Valuation Technique and the Inputs

Valuation techniques and inputs used in the recurring, non-recurring fair value measurements and disclosed fair values categorized within Level 2 and Level 3 of the fair value hierarchy as of December 31, 2022 and 2023, are as follows:

(in millions of Korean won)

December 31, 2022

Fair value

Level

Valuation techniques

Inputs

Assets

Trade and other receivables

Financial assets at fair value through other comprehensive income

￦

129,124

DCF Model

Guaranteed bond interest rate

Other financial assets

Financial assets at fair value through profit or loss

1,038,209

2,3

DCF Model

Adjusted Net Asset Model,

Monte-Carlo Simulation

Market Interest rate,

Underlying asset price

Financial assets at fair value through other comprehensive income

502,292

2,3

DCF Model, Market Approach Model

Discount rate

Derivative financial assets for hedging

190,830

2,3

DCF Model

Market observation
discount rate,

Swap interest rate

Investment properties

5,370,047

DCF Model

Liabilities

Borrowings

￦

9,405,992

DCF Model

Bond interest rate

Other financial liabilities

Financial liabilities at fair value through profit or loss

141,280

DCF Model

, Binomial Option Pricing Model,

Monte-Carlo Simulation

Forward exchange rate
Forward interest rate

Derivative financial liabilities for hedging

33,555

DCF Model

Market observation
discount rate

F-11

Table of Contents

T Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(in millions of Korean won)

December 31, 2023

Fair value

Level

Valuation techniques

Inputs

Assets

Trade and other receivables

Financial assets at fair value through other comprehensive income

￦

116,198

DCF Model

Guaranteed bond interest rate

Other financial assets

Financial assets at fair value through profit or loss

925,750

2,3

DCF Model

, Adjusted Net Asset Model,

Monte-Carlo Simulation

Market Interest rate, Underlying asset price

Financial assets at fair value through other comprehensive income

449,232

2,3

DCF Model

Market Approach Model

Discount rate

Derivative financial assets for hedging

159,211

DCF Model

Market observation discount rate,

Swap interest rate

Investment properties

5,276,169

DCF Model

Liabilities

Borrowings

￦

9,979,545

DCF Model

Bond interest rate

Other financial liabilities

Financial liabilities at fair value through profit or loss

136,106

2,3

DCF Model

Binomial Option Pricing Model,

Forward exchange rate

Forward interest rate

Derivative financial liabilities for hedging

24,547

DCF Model

Market observation discount rate

(5)

Valuation Processes for Fair Value Measurements Categorized Within Level 3

The Group uses external experts that perform the fair value measurements required for financial reporting purposes. External experts report directly to the chief financial officer (CFO) and discuss the valuation processes and results with the CFO in line with the Group’s closing dates.

(

)

Gains and losses on valuation at the transaction date

In the case that the Group values derivative financial instruments using inputs not based on observable market data, and the fair value calculated by the said valuation technique differs from the transaction price, then the fair value of the financial instruments is recognized as the transaction price. The difference between the fair value at initial recognition and the transaction price is deferred and amortized using a straight-line method by maturity of the financial instruments. However, in the case that inputs of the valuation techniques become observable in markets, the remaining deferred difference is immediately recognized in full in profit or loss.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

In relation to this, details and changes of the total deferred difference for the years ended December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	2022			2023
(in millions of Korean won)	Derivatives used for hedging			Derivatives used for hedging
I. Beginning balance	￦	832		￦	—
II. New transactions		—			—
III. Recognized at fair value through profit or loss		(832	)		—

IV. Ending balance (I+II+III)	￦	—		￦	—

38.	Interests in Unconsolidated Structured Entities

(1)

Details of information about its interests in unconsolidated structured entities, which the Group does not have control over, including the nature, purpose and activities of the structured entity and how the structured entity is financed, are as follows:


Classes of entities		Nature, purpose, activities and others
Real estate finance		A structured entity incorporated for the purpose of real estate development is provided with funds by investors’ investments in equity and borrowings from financial institutions (including long-term and short-term loans and issuance of Asset Backed Commercial Paper (“ABCP”) due in three months), and based on these, the structured entity implements activities such as real estate acquisition, development and mortgage loans. The structured entity repays loan principals with funds incurred from instalment house sales after the completion of real estate development or with collection of the principal of mortgage loan. The remaining shares are distributed to investors. As of December 31, 2023, this entity is engaged in real estate finance structured entity and generates revenues by receiving dividends from direct investments in or receiving interests on loans to the structured entity. Financial institutions, including the Entity, are provided with guarantees including joint guarantees or real estate collateral from investors and others. Consequently, the entity is a priority over other parties in the preservation of claim. However, when the credit rating of investors and others decreases or when the value of real estate decreases, the entity may be obliged to cover losses.

PEF and investment funds		Minority investors including managing members contribute to Private Equity Fund (“PEF”) and investment funds incorporated for the purpose of providing funds to the small, medium, or venture entities, and the managing member implements activities such as investments in equity or loans based on the contributions. As of December 31, 2023, the entity is engaged in PEF and investment funds structured entity, and after contributing to PEF and investment funds, the entity receives dividends for operating revenues from these contributions. The entity is provided with underlying assets of PEF and investment funds as collateral. However, when the value of the underlying assets decreases, the entity may be obliged to cover losses.

Asset securitization		The Group transfers accounts receivable for handset sales to its Special Purpose Company (“SPC”) for asset securitization. SPC issues the asset-backed securities with accounts receivable for handset sales as an underlying asset and makes payment for the underlying asset acquired.

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KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(2)

Details of scale of unconsolidated structured entities and nature of the risks associated with an entity’s interests in unconsolidated structured entities as

December 31, 2022 and 2023, are as follows:


(in millions of Korean won)	December 31, 2022
(in millions of Korean won)	Real Estate Finance		PEF and Investment Funds		Asset Securitization		Total
Total assets of unconsolidated structured entities	￦	3,539,827	￦	5,580,445	￦	2,044,989	￦	11,165,261
Assets recognized in statement of financial position
Other financial assets	￦	77,819	￦	237,907	￦	—	￦	315,726
Joint ventures and associates		123,138		268,275		—		391,413

Total	￦	200,957	￦	506,182	￦	—	￦	707,139

Maximum loss exposure 1
Investment assets	￦	200,957	￦	506,182	￦	—	￦	707,139
Investment agreement and others 2		40,914		91,224		—		132,138

Total	￦	241,871	￦	597,406	￦	—	￦	839,277

Includes the investments recognized in the Group’s financial statements and the amounts which are probable to be determined when certain conditions are met.

Investment agreements and others include purchase agreements, credit granting and others.


(in millions of Korean won)	December 31, 2023
(in millions of Korean won)	Real Estate Finance		PEF and Investment Funds		Asset Securitization		Total
Total assets of unconsolidated structured entities	￦	7,890,823	￦	4,833,966	￦	1,846,270	￦	14,571,059
Assets recognized in statement of financial position
Other financial assets	￦	216,040	￦	227,266	￦	—	￦	443,306
Joint ventures and associates		144,517		282,550		—		427,067

Total	￦	360,557	￦	509,816	￦	—	￦	870,373

Maximum loss exposure 1
Investment assets	￦	360,557	￦	509,816	￦	—	￦	870,373
Investment agreement and others 2		44,975		106,064		—		151,039

Total	￦	405,532	￦	615,880	￦	—	￦	1,021,412

Includes the investments recognized in the Group’s financial statements and the amounts which are probable to be determined when certain conditions are met.

Investment agreements and others include purchase agreements, credit granting and others.

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

39.	Information About Non-controlling Interests

(

)

Changes in Accumulated Non-controlling Interests

Profit or loss allocated to non-controlling interests and accumulated non-controlling interests of subsidiaries that are material to the Group for the years ended December 31, 2021, 2022 and 2023 are as follows:


(In millions of Korean won)	December 31, 2021
(In millions of Korean won)	Non- controlling Interests rate (%)			Accumulated non-controlling interests at the beginning of the year		Profit or loss allocated to non-controlling interests		Dividends paid to non- controlling interests			Others			Accumulated non-controlling interests at the end of the year
KT Skylife Co., Ltd.		49.7	%	￦	388,900	￦	24,795	￦	(8,279	)	￦	5,279		￦	410,695
BC Card Co., Ltd.		30.5	%		411,826		34,496		(6,434	)		59,040			498,928
KTIS Corporation		68.6	%		120,071		17,715		(1,837	)		(709	)		135,240
KTCS Corporation		79.7	%		129,502		21,394		(2,211	)		(3,574	)		145,111
Nasmedia, Co., Ltd.		56.0	%		112,549		15,185		(3,808	)		255			124,181


(In millions of Korean won)	December 31, 2022
(In millions of Korean won)	Non- controlling Interests rate (%)			Accumulated non-controlling interests at the beginning of the year		Profit or loss allocated to non-controlling interests		Dividends paid to non- controlling interests			Others			Accumulated non-controlling interests at the end of the year
KT Skylife Co., Ltd.		49.8	%	￦	410,695	￦	7,127	￦	(8,284	)	￦	13,651		￦	423,189
BC Card Co., Ltd.		30.5	%		498,928		47,909		(7,641	)		(14,539	)		524,657
KTIS Corporation		66.7	%		135,240		14,965		(2,226	)		(6,577	)		141,402
KTCS Corporation		78.3	%		145,111		18,888		(2,721	)		(7,397	)		153,881
Nasmedia, Co., Ltd.		56.0	%		124,181		15,610		(4,187	)		(179	)		135,425


(In millions of Korean won)	December 31, 2023
(In millions of Korean won)	Non- controlling Interests rate (%)			Accumulated non-controlling interests at the beginning of the year		Profit or loss allocated to non-controlling interests			Dividends paid to non- controlling interests			Others			Accumulated non-controlling interests at the end of the year
KT Skylife Co., Ltd.		49.4	%	￦	423,189	￦	(47,355	)	￦	(8,287	)	￦	(6,192	)	￦	361,355
BC Card Co., Ltd.		30.5	%		524,657		25,355			(4,960	)		3,023			548,075
KTIS Corporation		66.7	%		141,402		5,947			(2,451	)		(1,872	)		143,026
KTCS Corporation		78.3	%		153,881		14,228			(3,001	)		(2,313	)		162,795
Nasmedia Co., Ltd		55.9	%		135,425		10,679			(4,028	)		(467	)		141,609

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Table of Contents

T Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023

(

)

Summarized Financial Information on Subsidiaries

The summarized financial information for each subsidiary with non-controlling interests that are material to the Group, before inter-company eliminations, is as follows:


	December 31, 2022
(in millions of Korean won)	KT Skylife Co., Ltd.		BC Card Co., Ltd.		KTIS Corporation		KTCS Corporation		Nasmedia, Co., Ltd.
Current assets	￦	420,701	￦	3,152,622	￦	102,121	￦	296,209	￦	435,359
Non-current assets		938,465		2,513,453		294,087		123,517		81,586
Current liabilities		274,637		2,879,551		103,698		188,379		261,381
Non-current liabilities		229,042		1,229,649		95,506		40,240		14,349
Equity		855,487		1,556,875		197,004		191,107		241,215

	December 31, 2023
(in millions of Korean won)	KT Skylife Co., Ltd.		BC Card Co., Ltd.		KTIS Corporation		KTCS Corporation		Nasmedia, Co., Ltd.
Current assets	￦	425,661	￦	3,739,847	￦	111,313	￦	304,508	￦	411,774
Non-current assets		795,182		2,613,031		336,296		130,391		101,537
Current liabilities		353,839		3,661,263		116,271		187,621		251,207
Non-current liabilities		125,531		1,061,169		127,248		47,228		11,129
Equity		741,473		1,630,446		204,090		200,050		250,975

Summarized consolidated statements of comprehensive income for the years ended December 31, 2021,2022 and 2023 are as follows:


	2021
(in millions of Korean won)	KT Skylife Co., Ltd.		BC Card Co., Ltd.			KTIS Corporation			KTCS Corporation			Nasmedia, Co., Ltd.
Operating revenue	￦	772,950	￦	3,580,970		￦	487,801		￦	968,499		￦	125,876
Profit for the year		62,309		120,308			24,944			19,034			27,120
Other comprehensive income (loss)		12,686		2,270			3,725			(2,120	)		871
Total comprehensive income		74,995		122,578			28,669			16,914			27,991

	2022
(in millions of Korean won)	KT Skylife Co., Ltd.		BC Card Co., Ltd.			KTIS Corporation			KTCS Corporation			Nasmedia, Co., Ltd.
Operating revenue	￦	1,038,468	￦	3,897,090		￦	536,229		￦	1,031,010		￦	153,210
Profit for the year		20,941		148,341			15,917			17,634			27,691
Other comprehensive income (loss)		13,544		(5,286	)		(2,415	)		(134	)		(695	)
Total comprehensive income		34,485		143,055			13,502			17,500			26,996

F-11

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


	2023
(in millions of Korean won)	KT Skylife Co., Ltd.			BC Card Co., Ltd.		KTIS Corporation			KTCS Corporation			Nasmedia, Co., Ltd.
Operating revenue	￦	1,034,342		￦	4,027,450	￦	593,162		￦	1,035,911		￦	147,934
Profit for the year		(109,407	)		76,545		13,922			15,804			17,703
Other comprehensive income (loss)		(6,625	)		13,832		(3,162	)		(2,550	)		(1,890	)
Total comprehensive income		(116,032	)		90,377		10,760			13,254			15,813

Summarized consolidated statements of cash flows for the years ended December 31, 2021,2022 and 2023 are as follows:


	2021
(in millions of Korean won)	KT Skylife Co., Ltd.			BC Card Co., Ltd.			KTIS Corporation			KTCS Corporation			Nasmedia, Co., Ltd.
Cash flows from operating activities	￦	102,947		￦	(157,645	)	￦	49,011		￦	6,945		￦	44,500
Cash flows from investing activities		(352,116	)		(283,313	)		(27,143	)		(1,039	)		(16,966	)
Cash flows from financing activities		230,010			526,563			(23,126	)		(16,622	)		(9,843	)
Net increase (decrease) in cash and cash equivalents		(19,159	)		85,605			(1,258	)		(10,716	)		17,691
Cash and cash equivalents at beginning of year		99,834			240,584			31,779			75,440			53,720
Exchange differences		(3	)		293			—			(840	)		(15	)
Cash and cash equivalents at end of the year		80,672			326,482			30,521			63,884			71,396


	2022
(in millions of Korean won)	KT Skylife Co., Ltd.			BC Card Co., Ltd.			KTIS Corporation			KTCS Corporation			Nasmedia, Co., Ltd.
Cash flows from operating activities	￦	176,407		￦	(798,043	)	￦	13,809		￦	19,423		￦	22,015
Cash flows from investing activities		(78,928	)		(7,733	)		9,813			13,245			3,845
Cash flows from financing activities		(79,455	)		914,441			(29,199	)		(35,578	)		(11,136	)
Net increase (decrease) in cash and cash equivalents		18,024			108,665			(5,577	)		(2,910	)		14,724
Cash and cash equivalents at beginning of year		80,672			326,482			30,521			63,884			71,396
Exchange differences		(1	)		(100	)		—			840			13
Cash and cash equivalents at end of the year		98,695			435,047			24,944			61,814			86,133

F-1

Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021, 2022 and 2023


	2023
(in millions of Korean won)	KT Skylife Co., Ltd.			BC Card Co., Ltd.			KTIS Corporation			KTCS Corporation			Nasmedia, Co., Ltd.
Cash flows from operating activities	￦	207,207		￦	82,883		￦	50,892		￦	55,146		￦	8,116
Cash flows from investing activities		(125,343	)		(74,430	)		(17,636	)		(5,901	)		(30,910	)
Cash flows from financing activities		(50,811	)		(67,609	)		(32,872	)		(26,948	)		(11,077	)
Net increase (decrease) in cash and cash equivalents		31,053			(59,156	)		384			22,297			(33,871	)
Cash and cash equivalents at beginning of year		98,695			435,047			24,944			61,814			86,133
Exchange differences		—			(95	)		—			—			15
Cash and cash equivalents at end of the year		129,748			375,796			25,328			84,111			52,277

(3) Transactions with Non-controlling Interests

The effect of changes in the ownership interest on the equity attributable to owners of the Group for the years ended December 31, 2021, 2022 and 2023 is summarized as follows:


(in millions of Korean won)	2021		2022		2023
Carrying amount of non-controlling interests acquired	￦	14,702	￦	19,272	￦	3,022
Consideration paid to non-controlling interests		1,095		69,652		213,819

Effect of changes in equity (net amount)	￦	15,797	￦	88,924	￦	216,841

40.	Events After the Reporting Period

(1)

The Company has decided to acquire treasury stocks (

￦

27,100 million) in accordance with a resolution of the Board of Directors dated February 7, 2024, to enhance shareholder value. The acquired treasury stocks

(695,775 shares) were

retired in March 25, 2024.

(2)

The company issued the following bonds after the end of the reporting period (unit:

￦

million).

Type

Issued Date

Annual interest
rates

Maturity

Korean
won

The 200-1st Public bond

Feb. 27, 2024

3.552

Feb. 27, 2026-

120,000

The 200-2nd Public bond

Feb. 27, 2024

3.608

Feb. 26, 2027-

200,000

The 200-3rd Public bond

Feb. 27, 2024

3.548

Feb. 27, 2029-

80,000

F-12


	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 1098)		F-2
Report of Independent Registered Public Accounting Firm (PCAOB ID 1103)		F-5
Consolidated Statements of Financial Position as of December 31, 2022 and December 31, 2023		F-6
Consolidated Statements of Profit or Loss for the Years Ended December 31, 2021, 2022 and 2023		F-8
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2021, 2022 and 2023		F-9
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2021, 2022 and 2023		F-10
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2022 and 2023		F-13
Notes to the Consolidated Financial Statements		F-14